Earnings accounting conservatism; west european listed firms during crisis period

In this thesis the development over time of earnings accounting conservatism during the years 2006 till 2009 at West European listed firms is analyzed. It is assumed that this time span contains a crisis period. The earnings accounting conservatism degree is analyzed during the whole time span in which 2006 is a pre-crisis year and the years 2007 till 2009 a crisis period. The analysis describes the development of earnings conservatism throughout the entire time span. Prior to the analysis accounting conservatism is explained and motivations originating from literature to use conservatism are given. Different research approaches are discussed and the relation with accounting conservatism is described. Prior research concerning accounting conservatism is used to develop the hypotheses and an expectation for the development over time during the crisis period. Models to measure and detect conservatism are discussed and in the research design the used sample and models are given. The results of this thesis provide proof of the presence of earnings accounting conservatism during the years 2006-2009. During these years there is an indication of a decrease of the degree of earnings conservatism. However, no proof is provided of a decrease. This observation is linked to prior research and explanations of accounting conservatism.