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Title: Interaction between corporate governance changes and conservatism and their impact on performance evaluation and risk modelling
Author: Shin, J.
Awarding Body: University of Edinburgh
Current Institution: University of Edinburgh
Date of Award: 2006
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Abstract:
Internationally there have been series of company scandals over the last 30 years, which have led to the belief there is a need for improved corporate governance. The initial response was the Cadbury Report in 1992 and subsequent reports in UK have tackled other aspects of this perceived crisis. Many authors have studied the impact of corporate governance changes arising from these reports on firm performance. There are several studies that have tried to discover the relationship of the codes of practice, which have developed from the reports, and the risk management of companies. The studies have also sought the relationship between the changes to corporate governance structures, companies’ performance and risk to companies. Based on this literature several approaches have been developed and applied to the available data. The current study explores many of these ideas. In this study one of the major themes, which has developed, is accounting conservatism, which exists within the accounting process. Conservatism has existed within practice of the accounting reporting through time, but the pattern of conservatism became pervasive during the 1990s. Furthermore conservatism is enforced by corporate governance changes. The pervasive existence of conservatism induces information risk in the evaluation of firm performance, and hence to the measurement of firm risks. When firm performance is measured with income related measures, such as net income or income before interests and taxes, there is the possibility of misleading results occuring. Also there is a high likelihood of poor measure of firm risks of default risks when using accounting based default model such as Altman model and Ohlson model.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID: uk.bl.ethos.661870  DOI: Not available
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