Document Type


Date of Degree

Summer 2019

Degree Name

PhD (Doctor of Philosophy)

Degree In

Business Administration

First Advisor

Collins, Daniel W

First Committee Member

Hribar, Paul

Second Committee Member

Penno, Mark

Third Committee Member

Wilde, Jaron

Fourth Committee Member

Melessa, Samuel


Psychological biases in the form of sentiment can affect various economic decisions including accounting choices. Broadly defined, the term sentiment refers to unjustified beliefs about the future cash flow prospects of the firm (Baker and Wurgler 2006). Asymmetric timely loss recognition (ATLR) is particularly prone to managerial sentiment because the decision to recognize economic gains and losses is based, in part, on managers’ beliefs about the likelihood of future economic events affecting the firms. In this study, I examine the effect of psychological biases about future performance on current accounting choices via the effect of market-level managerial sentiment on ATLR. I find that ATLR decreases with managerial sentiment and that periods of high managerial sentiment are associated with lower concurrent write-offs but higher subsequent write-offs. This study enhances the implications of sentiment on firms’ accounting choices by identifying a time-varying macroeconomic determinant of ATLR that is based on psychological biases about future performance.


Asymmetric timely loss recognition, Behavioral finance, Conditional conservatism, Managerial sentiment


vii, 61 pages


Includes bibliographical references (pages 38-41).


Copyright © 2019 Nhat (Nate) Q. Nguyen