오류보고가 보수주의 정책에 미치는 영향

This paper analyzes the relation of report of prior period error correction and conservatism. When there are errors in financial information that had been declared by a firm, reliability as an important qualitative characteristic of financial information can be damaged. Thus, those who use the financial information in decision making change their prediction on corporate values, lower trust in financial information, and set a low value on financial reporting quality. In this context, the firm having errors attempts to enhance financial reporting quality as a measure to recover damaged trust on financial information, which would be expressed as intensification of conservatism, for conservatism enhances financial reporting quality as a method of accounting that mitigates asymmetry in information and reduces agency cost. The model presented in Ball and Shivakumar(2005, 2006) that is developed most recently is used to measure conservatism. They defined conservatism to be how rapid economic loss, unfavorable news for a firm, is reflected into accounting income when compared to economic gain, favorable news for a firm, measuring conservatism by using accruals and cash flow for operation. When compared to the degrees of conservatism between three years before error reporting and three years after error reporting, economic loss than economic gain was reflected into accounting income more timely after reporting of error correction, indicating conservatism was intensified. In addition, among methods of accounting on error correction, conservative accounting consistently increased in case of restatement or of large amount of error value. These results can be interpreted that the firm of error intensifies conservative accounting because reliability in financial information is damaged more as significance or severeness of errors is enhanced more. Finally, the results of analysis of titles of accounts available of conservative accounting are consistent with the main results of analysis. The results of this study indicate that intensification of conservatism can recover reliability in financial reporting and enhance financial reporting quality, as well as improvement in corporate governance such as changes in the board of directors or outside directors as corporate measure to offset negative economic effects including share price sliding or increase in cost of capital caused by error reporting after notification of error correction.