This study investigates whether accounting conservatism can reduce earnings management in the wake of uncertainty. It is hypothesized that conservative reporting during uncertainty can reduce earnings management and increase firm value. Using 5354 firm-year observations from 2005-2018 through Khan and watts model, we provide evidence that accounting conservatism is a way to put limits on earnings management for firms facing uncertainty. We find a statistically significant impact of conservative reporting on firm value during an uncertainty. Uncertainty at the firm level is measured by applying “prospector” and “defender” business strategy. To measure earnings management Modified Jones model and Dechow and Dichev approach models applied. Our results provide insights into conservative accounting and have critical and practical implications for investors, researchers and standard setters. After addressing endogeneity and applying GMM estimator, our results remain confirmed.

中文翻译：

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公司层面不确定性对盈余管理的影响和会计稳健性的作用

这项研究调查了在出现不确定性之后，会计保守主义是否可以减少盈余管理。假设不确定期间的保守报告会减少盈余管理并增加公司价值。我们使用可汗和瓦特模型使用2005年至2018年的5354个公司年度观察数据，提供了证据表明会计稳健性是对面临不确定性的公司进行盈余管理限制的一种方法。我们发现不确定性期间保守报告对公司价值的统计显着影响。公司层面的不确定性是通过应用“潜在客户”和“防御者”业务策略来衡量的。为了衡量收益管理，应用了改良的Jones模型以及Dechow和Dichev方法模型。我们的结果提供了对保守会计的见解，并对投资者，研究人员和标准制定者具有关键和实际意义。解决内生性并应用GMM估计器后，我们的结果仍然得到确认。