Firms supply accounting conservatism in response to debt/equity contracting, litigation, political costs, and taxation demand from stakeholders. I examine whether political connections between U.S. firms and politicians moderate and/or intensify the impact of these demands on the supply of conditional and unconditional conservatism. I measure political connections based on the association between firms’ campaign contributions and equity ownership in firms by U.S. House and Senate representatives. I measure conditional conservatism using an earnings-return model and unconditional conservatism using a persistent negative accruals proxy. I find that political connections moderate the effect of the debt contracting (litigation) demand for conditional (unconditional) conservatism. My results demonstrate whether and how political connections of U.S. firms can affect the four demands for and the supply of the two forms of conservatism. The collective evidence suggests that political connections serve as an alternative channel to reduce stakeholders’ debt contracting and litigation demand for accounting conservatism.

中文翻译：

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政治关系和会计保守主义

公司提供会计保守主义以响应利益相关者的债务/股权合同、诉讼、政治成本和税收需求。我研究了美国公司和政治家之间的政治联系是否会缓和和/或加强这些需求对有条件和无条件保守主义供给的影响。我根据美国众议院和参议院代表在公司的竞选捐款和公司股权之间的关联来衡量政治联系。我使用收益回报模型衡量有条件保守主义，使用持续负应计代理衡量无条件保守主义。我发现，政治关系缓和了有条件（无条件）保守主义的债务契约（诉讼）需求的影响。我的研究结果表明美国的政治联系是否以及如何 企业可以影响两种形式的保守主义的四种需求和供给。集体证据表明，政治联系是减少利益相关者对会计保守主义的债务合同和诉讼需求的替代渠道。