IDEAS home Printed from https://ideas.repec.org/a/taf/rcjaxx/v1y2013i1p32-46.html
   My bibliography  Save this article

Wage and Accounting Conservatism: Evidence from China

Author

Listed:
  • Yongjian Shen
  • Shangkun Liang
  • Donghua Chen

Abstract

Whereas employees want their wages to stay at a sustainably high level, managers want to cut labor costs. This contrast may lead to different accounting conservatism preferences between the two parties. We use Khan and Watts’ (2009) C score model to examine the effects of wage amount and rigidity on accounting conservatism. We find that the degree of accounting conservatism is positively correlated with (1) the amount of wages, (2) the rigidity of wages and (3) the number of employees. In addition, our results also show that conservatism has increased since the enactment of the Law of the People’s Republic of China on Employment Contracts in 2008. This paper connects two different fields (wage and accounting conservatism) and expands on contracts related to the conservatism raised by Watts (2003).

Suggested Citation

  • Yongjian Shen & Shangkun Liang & Donghua Chen, 2013. "Wage and Accounting Conservatism: Evidence from China," China Journal of Accounting Studies, Taylor & Francis Journals, vol. 1(1), pages 32-46.
    • Handle: RePEc:taf:rcjaxx:v:1:y:2013:i:1:p:32-46
    DOI: 10.1080/21697221.2013.781769
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/21697221.2013.781769
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/21697221.2013.781769?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:rcjaxx:v:1:y:2013:i:1:p:32-46. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/rcja .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.