Ownership Concentration and Accounting Conservatism: Portuguese Evidence

Abstract

Existing literature suggest that conservatism is to related to ownership structure. The Portuguese governance structure is characterized by the dominance of the largest shareholder who typically exercises significant influences on management decisions directly or indirectly. Therefore, for a sample of 26 non-financial listed Portuguese firms-year from 2002 to 2016, we examine the association between accounting conservatism and ownership concentration. The study’s results suggest that ownership concentration demand for more conservatism. The results also suggest that higher leverage and large firms have a greater demand for conservative accounting.