Global financial crisis and perceived accounting quality: the European perspective Online publication date: Sat, 13-Feb-2016
by Chandrasekhar Krishnamurti; Pran K. Boolaky
International Journal of Corporate Governance (IJCG), Vol. 6, No. 2/3/4, 2015
Abstract: While extant research has examined whether weaknesses in accounting systems can potentially trigger an economic crisis, there is very little work on the issue of whether a financial crisis could potentially affect the quality of accounting. Our study explicitly examines the changes in accounting quality during the recent global financial crisis (GFC). We posit the 'risk-avoidance' and 'managerial opportunism' hypotheses to examine the quality of accounting during the GFC. Our empirical work using country level perceived accounting quality shows support for the managerial opportunism hypothesis. Perceived accounting quality declined during the GFC, especially in European countries. Further, the changes in perceived accounting quality is related to changes in financial market quality supporting the 'financial market linkage' hypothesis. There is no evidence indicating that European countries were more adversely affected after controlling for determinants of perceived accounting quality. Our main result is robust to controls for potential endogeneity.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Corporate Governance (IJCG):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com
Our Blog 
Follow us on Twitter 
Visit us on Facebook