Ownership structures, board characteristics and the extent of accounting conservatism in vietnamese listed firms

Abstract

The paper investigates the influence of ownership structures and board of directors’ characteristics on the extent of conservative accounting practiced by listed companies in Vietnam covering 558 firms with 2,161 observations in the period of 2011–2022. The authors rely on the quantitative method and multivariate regression analyses to verify the proposed hypotheses. Concerning the influence of ownership variables, the findings explore that state ownership (SO) and foreign ownership (FO) demonstrate a significant negative association with firms’ conservatism level, whereas large ownership (LO) indicates a significant positive association with firms’ conservatism degree. No association between management ownership (MO) and firm’s conservatives was found in this study. With regard to board of directors’ characteristic variables, the study results show that size of the board (BS), independence of the board (BI), and women on the board (GD) positively associated with firms’ conservatism report, while duality (DUAL) demonstrates a significant negative association with firms’ conservatism level. The research suggests some implications and recommendations for regulatory agencies, listed firms, investors, and other stakeholders to have appropriate behavioral decisions related to ownership structures and board characteristics of listed firms to ensure high level of accounting conservatism in a frontier market as Vietnam.

Keywords

• Conservative accounting
• ownership structures
• board of directors’ characteristics
• Vietnam
• listed firms
• M40