Alfredo Sarlo Neto

Effects of income smoothing practices on the conservatism of public companies listed on the BM & FBOVESPA

The aim of this study was to investigate two aspects of accounting information that may be inherently related: income smoothing practices and conditional conservatism. Theoretically, the more a firm employs income smoothing, i.e., uses accruals to reduce the variability of profits, the less possibility there is for the timely acknowledgement of future economic losses (i.e., bad economic news) in profits. Eckels model (1981) was used in this study to classify listed companies as smoothing or non-smoothing, and Basus model (1997) was used to quantify the degree of conditional conservatism present in each firm. To make the results more robust, samples were created with annual stock return data from both March and December. The results indicated that non-smoothing firms had a higher degree of conditional conservatism, i.e., more opportunity to recognize future economic losses because the market could use the stock return data to anticipate future losses contained in the information regarding profits. This research made it possible to observe theoretical relationships between properties of accounting information: i) there is a relationship between income smoothing and conditional conservatism (i.e., accounting choices); ii) the informational environment of the Brazilian capital market contributes to the market distinction between smoothing and non-smoothing firms; and iii) the improvement of the capital market provides economic operators with greater insight into economic losses that are contained in accounting results.

Concentração de votos e acordo de acionistas: influências sobre o conservadorismo

This study investigates how two features of the ownership structure of Brazilian companies, the voting rights concentration and the shareholders agreement, are associated with the conditional conservatism proposed * Artigo apresentado no 4o Congresso ANPCONT, em Natal-RN, 2010. RCF_v21n54_miolo.indb 6 21/1/2011 08:01:46 Concentracao de votos e acordo de acionistas: influencias sobre o conservadorismo Revista Contabilidade & Financas, USP, Sao Paulo, v. 21, n. 54, p. 6-22, setembro/dezembro 2010 7 by Basu (1997). This association was founded on the effects of entrenchment and enforcement. Considering that the degree of conservatism of a firm is tied to the incentives arising from mechanisms that reduce the informational risk to stakeholders, this study was developed on the following research question: What is the influence of both the voting rights concentration and shareholders agreement on the degree of conservatism in the companies listed on Bovespa? The main goal of this work is to deal with factors not yet considered in the (national and international) literature produced in this line of research, and provides evidence about the influence of ownership structure on conservatism in the Brazilian market, which is marked by a, agency conflict between controlling shareholders (controller) and minority shareholders. The sample of the paper comprises 617 observations of non-financial companies traded on Bovespa during the period from 2000 to 2008. Alternatively, another sample was selected, disregarding the observations for 2008, as a means to remove the effects of the financial crisis registered that year. The evidences indicate that the voting rights concentration contributes to decrease the degree of conservatism, while, on the other hand, the stockholders agreement contributes to an increase. Alternatively, the results considered in the global crisis year distort the Basu model (1997). The researchers hope this study contributes for investors, regulators, researchers and analysts to understand the function of accounting information in companies’ governance process.

O diferencial no impacto dos resultados contábeis nas ações ordinárias e preferenciais no mercado brasileiro

This study examines the impact of financial statements on the prices of companies traded in the Brazilian market and aims to verify how the returns of different - common and preferred capital - types of stock, react to the disclosure of annual financial results. Hence, the methodology used by Ball and Brown (1968) was applied to two groups: the first, made up by common stock, and the second by preferred capital stock. The samples were built on the basis of data for companies traded in the Sao Paulo Stock Exchange (BOVESPA), considering the period from 1990 to 2002. Evidence indicates that variations in the price of preferred capital stock are in accordance with disclosed results, which confirms the hypothesis about the relevance of accounting information for investors. On the other hand, what common stock is concerned, the hypothesis was partially confirmed, since only the portfolio with negative results followed the same direction as the disclosed results.

Política de dividendos, na prática, é importante?

This article treats the empiric results about the importance of financing policies, especially dividend policies. Three focuses were discussed: the Signalling Hypothesis, the Agency Hypothesis and the Dividend Clientele Hypothesis. Some tendency can be observed in the first two approaches. Administrators believe that dividends contain signs of organizational future and that dividends tend to be used as reducers of agency conflict problems. However, in the three approaches, there still does not exist conclusive empiric evidence, especially because the specific characteristics of different markets may lead management to establish differentiated policies.

O inter-relacionamento entre políticas de dividendos e de investimentos: estudo aplicado às companhias Brasileiras negociadas na Bovespa

This article presents an empirical study about a possible interrelation between dividend and investment policies practiced by Brazilian companies listed on the Sao Paulo Stock Exchange (BOVESPA). The objective was to identify if the Brazilian companies modify their dividend policy in view of the need for permanent investments. The theoretical framework of this research is particularly based on the 1961 classic proposals by Miller and Modigliani. The empirical study was realized through multiple regression analysis, applied to a sample of 476 pooled data for the period from 1998 to 2002. The sample was studied, contemplating all data, and was divided in quartiles, according to company size and volume of loans in the period. The main evidence shows that there is no relation between these policies. As the Brazilian market cannot be considered perfect, this evidence reveals that possible imperfection in other markets are not effi cient justifi cations to explain evidences about a relation between dividend and investment policies. Other factors infl uenced the empirical results. In the Brazilian case, the regulation of dividend politics cannot be ignored in this type of analysis.

Influence of Dividends on the Earnings Informativeness: Empirical Evidence in the BM & FBOVESPA

In this study we verify if payment of dividends increases the earnings informativeness of firms listed on the Sao Paulo Stock Exchange (BOVESPA). The study is based on the paper of Francis, Schipper and Vincent (2005), and adds an interaction variable between earnings and dividends in order to answer the research problem, which in turn raises the possibility that the dividends increase the earnings informativeness. The study is explanatory, with a positive approach and produces empirical results from information available in the Economatica® database. The period of the study covered the period from 2000 to 2009. We used multiple linear regression of panel data of a sample of 229 firms over 969 observations. Our findings indicate that earnings, when linked with the dividends, are more informative to explain/predict the stock price than if they are examined individually. Thus, the results suggest that dividends contribute positively to the informativeness of earnings as a predictor of stock returns.

Factors influencing the disclosure of information about operating segments in Brazil: analysis encompassing the first five years of CPC 22 Application

This study aims to identify the factors that influence the level of disclosure of information about operating segments in Brazil. The study is initially developed from the analysis of companies’ financial statements with reference to the requirements contained in Pronouncement CPC 22. Subsequently, the statistical model of multiple linear regression analysis is used. The disclosures related to the years from 2010 to 2014 are addressed; 2010 was the first year that the disclosure was mandatory in Brazil. The study encompasses 231 companies distributed across 20 economic sectors. Hypotheses concerning eight characteristics identified as potential factors affecting the level of disclosure are analysed. No significant results were found for the characteristics, “profitability”, “industry concentration”, “profit or loss” and “year of publication”, indicating that these factors do not influence such disclosure. Regarding the other four characteristics investigated, the results confirmed the hypotheses tested. Thus, it is concluded that the characteristics of “size”, “indebtedness”, “corporate governance” and “audit” are factors that affect the dissemination of information about operating segments in Brazil.

The influence of the ownership structure over the informativeness of the accounting earnings disclosed by companies traded on the Bovespa stock market

This study examines the effects of the ownership structure over the informativeness of the accounting earnings that are disclosed by companies traded on the Brazilian stock market. Informativeness is about measuring how intense is the relation between accounting earnings and stock prices considering the angular coefficient of the probable straight line between these two variables. The investigation focuses on the specific influence of two ownership structure characteristics, viz. the concentration of voting rights and the divergence between the rights of shares (vote versus cash flow), on the informativeness of the accounting earnings. The relation between the informativeness of the accounting earnings and the concentration of votes and the divergence among rights was based on the entrenchment and alignment effects. The sample used in the research was made up of non-financial companies listed at the Sao Paulo Stock Exchange (Bovespa) from 2000 to 2006. The results show that the concentration of the voting rights has a negative influence on the accounting earnings informativeness. As to the divergence between rights, the negative influence over that informativeness is seen only when there is an excess of votes. The most negative impact on the informativeness is observed when a combination between the concentration of votes and the divergence between rights occurs. Key words: informativeness, ownership structure, concentration of voting rights, divergence between the rights of shares.