Does corporate governance affect accounting conservatism? Empirical evidence in the French context

Abstract

In the present study, we investigate the relationship between corporate governance (Boards of directors, Ownership) and accounting conservatism. We examine our model in the context of French firms over the period 2007-2011. We predict that an effective set of corporate governance mechanisms is positively related to a higher level of accounting conservatism. Empirical tests show that accounting conservatism depends mainly on the effectiveness of the board, the management shareholding, and the audit quality.