Accounting policies has a great impact on financial results and performance of companies. Therefore, the users of accounting information must know which factors determine companies’ accounting policy choices. The aim of this study is to provide evidence for the economic determinants that may affect company’s accounting policy choices by examining three key accounting method disclosures in the 2005 annual reports of the publicly-held companies listed on the Istanbul Stock Exchange. Watts and Zimmerman proposed three hypotheses to explain the actions of management’s accounting policy choices; the debt-equity hypothesis, the size hypothesis, and the bonus plan hypothesis. The most of empirical study confirmed the debt-equity hypothesis, the size hypothesis and the bonus plan hypothesis. However, in this empirical study, the results of multiple logistic regression analysis show that the economic determinants such as company’s leverage ratio, company’s size and bonus plan don’t explain the management’s income increasing (decreasing) accounting policy choice at publicly-held companies listed on the Istanbul Stock Exchange.
Alan : Eğitim Bilimleri; Sosyal, Beşeri ve İdari Bilimler
Dergi Türü : Uluslararası
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