Agency costs and conditional conservatism of public companies in the Brazilian electric industry

Costos de agencia y conservadurismo condicional de empresas públicas en la industria eléctrica brasileña

Paulo Vitor Souza de Souza Henrique Carvalho Bezerra Morais

Suma de Negocios, 15(32), 17-28, enero-junio 2024, ISSN 2215-910X

https://doi.org/10.14349/sumneg/2024.V15.N32.A3

Received October 26, 2023
Accepted January 12, 2024
Online: February 9, 2024

Resumen

Introducción / objetivo: en las organizaciones los conflictos de intereses generan costos de agencia para mitigar el oportunismo de los agentes. La información contable de alta calidad reduce estos conflictos al minimizar la asimetría de la información. Por tanto, este estudio tiene como objetivo investigar la relación entre los costos de agencia y el conservadurismo condicional en empresas brasileñas del sector eléctrico listadas en la B3.

Metodología: se utilizaron datos de 21 empresas del sector eléctrico brasileño para el período de 2012 a 2020. Se analizaron 24 atributos asociados con los costos de agencia, y el modelo de conservadurismo condicional de Ball y Shivakumar (2005) se empleó como medida de calidad de la información contable. Los resultados se obtuvieron mediante modelos de regresión de datos en panel.

Resultados: según el modelo central de conservadurismo condicional, las empresas tienden a ser optimistas en lugar de conservadoras, anticipando ganancias en lugar de pérdidas. Los resultados, evaluados en cinco dimensiones, revelaron que factores como la composición del consejo, la compensación variable y los acuerdos con accionistas reducen el optimismo, mientras que las auditorías con salvedades, los plazos más largos y la existencia de un comité de auditoría permanente aumentan el optimismo. Por tanto, se identifican atributos que influyen en el optimismo, la neutralidad de la información contable y, en consecuencia, la calidad de los informes financieros.

Conclusiones: este estudio beneficia a varios usuarios de la información contable. Los inversores pueden identificar políticas de gobernanza que alineen intereses, los reguladores pueden mejorar la supervisión y los miembros de las organizaciones pueden adoptar políticas que fomenten la alineación de intereses entre los principales y los agentes.


Palabras clave:
Costos de agencia,
sector de energía eléctrica,
conservadurismo condicional,
optimismo condicional,
neutralidad, Brasil.

Códigos JEL:
M41, G34, O16, N26.

Abstract

Introduction / objective: In organisations, conflicts of interest give rise to agency costs aimed at mitigating agent opportunism. High-quality accounting information reduces these conflicts by minimising information asymmetry. Consequently, this study aims to investigate the relationship between agency costs and conditional conservatism in Brazilian electric power industry companies listed on the B3.

Methodology: Data from 21 Brazilian electric power industry companies for the period 2012 to 2020 were utilised. Twenty-four attributes associated with agency costs were analysed, and Ball and Shivakumar’s (2005) conditional conservatism model was employed as a measure of accounting information quality. Panel data regression models were used to obtain the results.

Results: According to the central conditional conservatism model, companies tend to exhibit optimism rather than conservatism, anticipating gains instead of losses. Results, assessed across five dimensions, revealed that factors such as board composition, variable compensation, and agreements with shareholders reduce optimism, while qualified audits, longer tenures, and the presence of a permanent audit committee increase optimism. Therefore, attributes that influence optimism, accounting information neutrality, and consequently, financial reporting quality, are identified.

Conclusions: This study benefits various users of accounting information. Investors can pinpoint governance policies that align interests, regulators can enhance oversight, and organisation members can adopt policies that encourage the alignment of interests between principals and agents.


Keywords:
Agency costs,
electric power industry,
conditional conservatism,
conditional optimism,
neutrality, Brazil.

Artículo Completo
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Federal University of Pará, Belém – PA, Brazil
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