Brazilian capital market governance segments: differences in the conditional conservatism in reported earnings

The research examines whether, by virtue of the assumed commitments relative to information disclosure, the public companies differentiation, carried out by the S o Paulo Stock Exchange (Bovespa) according to distinct levels of corporate governance, provokes distinction in the conditional conservatism degree (identified by the asymmetric anticipation of economic losses) of earnings reported in the respective accounting statements. The premise adopted by Bovespa isthat the acceptance of differentiated information disclosure practices and ownership protection corporate rules would lead to accounting information of higher quality, with consequent: (i) risk reduction; and (ii) return increment for investors. The statements quality measurement is carried out employing measurement models of the conditional conservatism present in the accounting reports, based on the reversion of transitory components in profits and in the association of accruals with cash flows, assessed by regression using panel data. The research results confirm the raised hypothesis that there is not any differentiation in the conditional conservatism patterns of reported earnings, not evidencing timely asymmetric anticipation of economic losses in the balance sheets of public companies listed at Bovespa in any of the groups.