Accounting-policy choice and firm characteristics in the Asia pacific region: an international empirical test of costly contracting theory
This study provides evidence on the cross-sectional relationship between firm-specific variables and management's choice of accounting policies by examining four key accounting-policy disclosures in the 2000/2001 annual reports of 442 listed companies in the Asia Pacific region. The dependent v...
| Main Authors: | , |
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| Format: | Journal Article |
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Elsevier
2006
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| Online Access: | http://hdl.handle.net/20.500.11937/46725 |
| _version_ | 1848757640365080576 |
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| author | Astami, E. Tower, Greg |
| author_facet | Astami, E. Tower, Greg |
| author_sort | Astami, E. |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | This study provides evidence on the cross-sectional relationship between firm-specific variables and management's choice of accounting policies by examining four key accounting-policy disclosures in the 2000/2001 annual reports of 442 listed companies in the Asia Pacific region. The dependent variable is the composite measure for the income increasing (decreasing) accounting-policy choice tendency. The results show that firm-specific variables linked to Costly Contracting Theory partially explain management's choice of accounting policies. Companies that pursue income-increasing accounting techniques are characterized by lower financial leverage, lower level of ownership concentration, and higher investment opportunity sets. This finding holds true when country and industry control variables are not considered. When the control variables are included, the CCT variables are less a factor and instead country of reporting provides the strongest explanation for company managers' choice of accounting policies. Indonesian companies utilize the most income-decreasing accounting technique. |
| first_indexed | 2025-11-14T09:31:18Z |
| format | Journal Article |
| id | curtin-20.500.11937-46725 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T09:31:18Z |
| publishDate | 2006 |
| publisher | Elsevier |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-467252017-09-13T15:57:06Z Accounting-policy choice and firm characteristics in the Asia pacific region: an international empirical test of costly contracting theory Astami, E. Tower, Greg This study provides evidence on the cross-sectional relationship between firm-specific variables and management's choice of accounting policies by examining four key accounting-policy disclosures in the 2000/2001 annual reports of 442 listed companies in the Asia Pacific region. The dependent variable is the composite measure for the income increasing (decreasing) accounting-policy choice tendency. The results show that firm-specific variables linked to Costly Contracting Theory partially explain management's choice of accounting policies. Companies that pursue income-increasing accounting techniques are characterized by lower financial leverage, lower level of ownership concentration, and higher investment opportunity sets. This finding holds true when country and industry control variables are not considered. When the control variables are included, the CCT variables are less a factor and instead country of reporting provides the strongest explanation for company managers' choice of accounting policies. Indonesian companies utilize the most income-decreasing accounting technique. 2006 Journal Article http://hdl.handle.net/20.500.11937/46725 10.1016/j.intacc.2005.12.004 Elsevier restricted |
| spellingShingle | Astami, E. Tower, Greg Accounting-policy choice and firm characteristics in the Asia pacific region: an international empirical test of costly contracting theory |
| title | Accounting-policy choice and firm characteristics in the Asia pacific region: an international empirical test of costly contracting theory |
| title_full | Accounting-policy choice and firm characteristics in the Asia pacific region: an international empirical test of costly contracting theory |
| title_fullStr | Accounting-policy choice and firm characteristics in the Asia pacific region: an international empirical test of costly contracting theory |
| title_full_unstemmed | Accounting-policy choice and firm characteristics in the Asia pacific region: an international empirical test of costly contracting theory |
| title_short | Accounting-policy choice and firm characteristics in the Asia pacific region: an international empirical test of costly contracting theory |
| title_sort | accounting-policy choice and firm characteristics in the asia pacific region: an international empirical test of costly contracting theory |
| url | http://hdl.handle.net/20.500.11937/46725 |