THE EXPLOSION IN THE NUMBER OF SHAREHOLDERS IN THE BRAZILIAN CAPITAL MARKET: WHAT IS THE RELATIONSHIP WITH ACCOUNTING CONSERVATISM?
Keywords:
Number of Shareholders, Accounting Conservatism, Earnings QualityAbstract
This study analyzed the relationship between changes in the number of shareholders and the conditional conservatism proposed by Basu (1997) for publicly traded Brazilian companies. The work observed the ownership structure of companies through the total number of shareholders, a factor not yet explored in the national literature. We collected data from the Comdinheiro database and the companies' reference forms. The sample used in the study is composed of Brazilian companies listed in Brasil, Bolsa, Balcão (B3) between 2015 and 2020, totaling 673 company-year observations. We also used an alternative sample with 560 company-year observations, excluding the 2020 data, to expunge the coronavirus pandemic effects. The results suggest a negative relationship between the size of the shareholder base and the conditional conservatism of companies, contrary to expectations. Based on the sample adopted, there was a general increase in the conditional conservatism of Brazilian companies for the years 2018, 2019, and 2020 compared to 2015, 2016, and 2017. Considering the explosion in the number of shareholders registered in B3 from 2018, our findings raise doubts about the ability of new investors to monitor company managers and controllers and positively influence the preparation and quality of accounting numbers.
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