Title:	Accounting Conservatism and Performance Covenants:A Signaling Approach
Authors:	JEFFREY L. CALLEN, FENG CHEN, YIWEI DOU and BAOHUA XIN
Keywords:	Accounting Conservatism
Issue Date:	2009
Description:	This study examines the relation between performance covenants in private debt contracting and conservative accounting under adverse selection. We find that under severe adverse selection (i.e., high information asymmetry), accounting conservatism and performance covenants act as complements to signal that the borrower is unlikely to appropriate wealth from the lender. No such relation obtains in a low information asymmetry regime.
URI:	http://196.189.45.87:8080/handle/123456789/105175
Appears in Collections:	Accounting and Finance

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