Financial Reporting Incentives for Conservative Accounting: The Influence of Legal and Political Institutions

In this paper, we explore how reported accounting numbers are shaped by the institutional structure of the country in which firms are domiciled. We seek deeper understanding into the nature of financial reporting incentives created by an economy's institutional structure. We focus on financial reporting incentives related to accounting conservatism. To this end, we empirically analyze relations between key characteristics of economy-level...