محافظه کاری حسابداری و عملکرد شرکت: تاثیر تعدیل کننده‌ هیات مدیره Accounting Conservatism and Corporate Performance: The Moderating Effect of the Board of Directors

We are currently witnessing a set of recommendations about governance and the quality of the accounting information disclosed by large companies. Such recommendations can detect the defects in order to deal with and control them [1]. In this context, accounting conservatism is a tool which is often used to assess the quality of the accounting standards. According to Cadbury and Mallin, the governance system needs a good quality of information to eliminate or reduce the information asymmetry between the company’s executives and their stakeholders [2,3]. The governance systems can still counter balance the power and affect the relationship between the quality of the accounting information and performance. Its role is essential in terms of actors and tools. According to Gray, the accounting conservatism is a prudent accounting measure in the face of uncertainty of future events. This practice varies according to the European accounting or Anglo-Saxon systems [4]. Bebchuck and Roe identified two sources of dependency on corporate governance [5]. The first is guided by the structures that existed before, and the second is guided by the legal rules governing the relationships between the investors, the shareholders and the leaders. Deffains and Guigou tried to explain the persistent differences in the governance structures, especially, between the US and Europe and proposed different ways to be followed by the countries which are founded upon different legal systems [6]. According to Monks, corporate governance refers to the means by which the dominant decision makers (typically managers) are controlled by other stakeholders. The governance structure specifies the allocation of rights and responsibilities among the various participants in the corporation, such as the board, the managers, the shareholders and other stakeholders and clearly explains the rules and procedures required for decision making. It also describes the targets put in place and the necessary means to achieve these objectives and monitor performance (OECD 1999). The empirical studies, which focused on the relationship between the governance structure and the information dissemination, concluded that there are links between some mechanisms of governance and voluntary information disclosure. Through these mechanisms, the information is involved in the alignment of the executive and stakeholders’ interests. For Jacquillat, by means of the internal audit, the board ensures the control over the financial reporting [7]. On the other hand, John and Senbet and Fama argue that the characteristics of the board can have an effect on the quality of financial reporting [8,9]. Actually, the board is the main source of annual and quarterly information for the shareholders [10]. Its role main function is to actively supervise the management team and redirect it when necessary [11,12]. It comes directly from the shareholders’ votes and can prompt the leaders to provide high quality information. According to Mizruchi, being a member of several boards provides administrators with an important source of information on practices and corporate policies [13]. It is a determinant positively associated with the directors’ perception of their ability to contribute to board’s debates [14]. Since the board is a supervisory body the effectiveness of which is essential, it would be interesting to analyze its impact on the relationship between the quality of the accounting information represented by the level of the accounting conservatism and the company’s performance. In this sense, we seek to answer the following question: What is the contribution of the Board of directors to the relationship between accounting conservatism and corporate performance? For this purpose, it would be necessary to consider the moderating effect of this mechanism. Embedding this effect within our analysis helps improve the existing literature and complete the analyses dealing with this issue. The remainder of the paper is structured as follows: we begin with a brief survey of the empirical literature. The description of the sample data and variables as well as the presentation and discusses of our empirical findings will be figured in a next part.