ACCOUNTING CONSERVATISM AND THE EXPERTISE OF BOARD MEMBERS
Keywords:
Accounting, Conservatism, Corporate GovernanceAbstract
This study aimed to analyze the advisory value of the expertise of board directors in Brazilian entities as a relevant parameter impacting accounting conservatism. The data for this study are secondary, with a sample composed of 50 firms from the B3 Brazil Stock Exchange, including cyclical and non-cyclical entities, during an observation period between 2017 and 2019. The analytical method used in this study is the analysis of data in Balanced Fixed Effects Panel. The results demonstrate that the expertise of board directors has a positive and significant effect on accounting conservatism, suggesting that directors with more experience and technical-professional skills tend to increase the level of conservatism and, therefore, enhance corporate governance by helping companies report losses proactively. The model showed a satisfactory average fit of the adjusted coefficient of determination (adjusted R²). Thus, this study highlights the importance of the expertise of board directors in the context of corporate governance and in managing accounting conservatism, confirmed by results suggesting that directors with expertise can play a crucial role in improving the quality of financial information and the ability of companies to anticipate losses.
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