会议论文摘要：
This study examines how political connections influence financial reporting quality measured as the timeliness of loss recognition. We propose and test the proposition that government intervention via top managers with political ties changes the incentives of financial reporting and motivates politically connected SOEs in China to adopt less conservative accounting practice. Based on a sample of non-financial A-share firms from 2001 to 2006, we find that political connections reduce conservatism only in SOEs that are controlled by local governments, but not in SOEs that are controlled by the central government or firms that are owned by private entities. This is consistent with more intervention in SOEs by local government bureaucrats for their self-interests or fundamentally different incentives of non-SOEs in establishing political connections. We further show that the negative effect of political connections on timely loss recognition is mainly observed in regions with better economic conditions such as lo
