Conservative Reporting and Securities Class Action Lawsuits
研究了会计保守性（特别是条件保守性）与证券集体诉讼发生及结果（市场反应、诉讼时长、驳回率、罚款）的关系，发现条件保守性越高的公司诉讼后果越有利。
SYNOPSIS Positive accounting theory predicts that conservative financial reporting averts GAAP-based litigation. However, very little empirical evidence addresses whether and how accounting conservatism provides these benefits. Using a sample of lawsuits against public companies for alleged violations of U.S. GAAP, we examine the association of accounting conservatism with subsequent initiation of lawsuits and with four litigation outcomes: market reactions to lawsuits, duration of lawsuits, dismissals of lawsuits, and penalties approved by courts. We find that firms with greater degrees of conditional conservatism experience more favorable consequences on all five dimensions of litigation occurrence and outcomes. Several measures of unconditional conservatism are not associated with the litigation variables. Our study provides new empirical evidence supporting Watts's (2003a) litigation explanation for accounting conservatism. JEL Classifications: M41.