Browse > Article
http://dx.doi.org/10.5392/JKCA.2018.18.07.527

Impact of the Normalization Policy of Public Institutions on Accounting Conservatism  

Jang, Ji-Kyung (동서대학교 경영학부)
Publication Information
The Journal of the Korea Contents Association / v.18, no.7, 2018 , pp. 527-535 More about this Journal
Abstract
This study examines how the implementation of the Normalization policy of public institutions aimed at reducing debt affects accounting conservatism in public corporations. In particular, we analyze the general behavior of accounting conservatism based on debt ratio, and analyze whether the policy has changed this behavior of conservatism. Empirical findings are summarized as following. We show that debt ratios are positively associated with conservatism, consistent with the result for the private corporations. This result means that public corporations increase their conservatism as their debt ratios increase. However, no significant effect is found in this relationship after the implementation of the policy. This finding implies that the implementation of Normalization policy is not a factor that alters the conservative accounting practices of public corporations. This suggests that the recent debt reduction performance of public corporations is irrelevant to conservatism and is the result of the actual process of normalization of management. The results documented in this paper provide an important empirical evidence for evaluating the performance of the government policy at the present time when the debt reduction policy of public institutions is viewed more important than ever.
Keywords
Debt Ratio; Conservatism; Normalization Policy; Public Corporations; Public Institutions;
Citations & Related Records
연도 인용수 순위
  • Reference
1 R. Ball, S. P. Kothari, and A. Robin, "The Effect of International Institutional Factors on Properties of Accounting Earnings," Journal of Accounting and Economics, Vol.29, No.1, pp.1-51, 2000.   DOI
2 R. L. Watts, "Conservatism in Accounting Part Ι: Explanations and Implications," Accounting Horizons, Vol.17, No.3, pp.207-222, 2003a.   DOI
3 R. Ball and L. Shivakumar, "Earnings Quality in U.K private Firms: Comparative Loss Recognition Timeliness," Journal of Accounting and Economic, Vol.39, No.1, pp.83-128, 2004.   DOI
4 S. Penman and X. Zhang, "Accounting Conservatism, the Quality of Earnings, and Stock Returns," The Accounting Review, Vol.77, No.2, pp.237-264, 2002.   DOI
5 김정옥, 배길수, "보수주의와 발생액," 회계저널, 제18권, 제2호, pp.1-31, 2009.
6 백원선, 이수로, "보수주의, 이익지속성 및 가치평가," 회계학연구, 제2권, 제1호, pp.1-27, 2004.
7 A. Ahmed, B. Billings, R. Morton, and M. Stanford-Harris, "The Role of Accounting Conservatism in Mitigating Bondholder-Shareholder Conflicts over Dividend Policy and in Reducing Debt Costs," The Accounting Review, Vol.77, No.4, pp.867-890, 2002.   DOI
8 S. Basu, "The Conservatism Principle and the Asymmetric Timeliness of Earnings," Journal of Accounting and Economics, Vol.24, No.1, pp.3-37, 1997.   DOI
9 김정옥, 배길수, "기업의 특성이 회계보수성에 미치는 영향," 회계학연구, 제31권, 제1호, pp.69-96, 2006.
10 이균봉, 이미향, "보수주의와 이익조정의 관련성," 국제회계연구, 제20집, 제1권, pp.75-101, 2007.