The Effect of Accounting Conservatism on Cash Holdings: Evidence from Agency Cost

• Main Authors: Su-Chiu Ho, 何素秋
• Other Authors: Yi-Mien Lin
• Format: Others
• Language: zh-TW
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/57776896248994794475

碩士 === 國立中興大學 === 高階經理人碩士在職專班 === 104 === The Effect of Accounting Conservatism on Cash Holdings: Evidence from Agency Cost Abstract This study first explores whether the firm with higher accounting conservatism has smaller agency problems between managers and stakeholders; and whether the firm’s higher agency costs will affect its change in cash holdings. Next, this study examines the relationship between accounting conservatism and the change rate in cash holdings for financing firms. Finally, this study investigates that whether the financing firm with higher accounting conservatism and higher the increase rate in cash holdings has a stronger higher precautionary motive The findings show that the firm’s accounting conservatism can slow down the firm’s agency cost due to agency problem. The change rate in cash holdings of a firm decreases in agency cost. For financing firm with seasoned equity offerings and long-term debts, there is a positively relationship between accounting conservatism and the change rate in cash holdings. Moreover, the evidence indicates that when the financing firms with higher accounting conservatism and higher increase rate of cash holdings, they have stronger precautionary motives.