Akram Khalilov

Khalilov, Akram (2025)

Informational and cushioning properties of conservative balance sheets: a study of crises resilience

Review of Quantitative Finance and Accounting Doi: 10.1007/s11156-025-01395-4

This study examines the informational and cushioning properties of balance sheet conservatism (BSC) and their role in mitigating the adverse effects of financial crises. I document that, due to informational property, high-BSC firms raise more debt and have a lower cost of debt financing during the crisis. The cushioning property of BSC is associated with lower earnings volatility, likelihood of significant asset write-downs and probability of covenant violations. These properties contribute to superior performance, including smaller declines in stock prices, investment, employment, and productivity. An out-of-sample test using the setting of the Great Depression (1929–1933) confirms the aforementioned findings. Overall, a path analysis suggests that BSC effects operate mostly through cushioning (informational) property contributing 39% (11%) to overall firms’ performance during the crisis.

Khalilov, Akram; Gazizova, Irina & Osma, Beatriz Garcia (2025)

Directors' Bankruptcy Experience and Financial Reporting Choices

Journal of Business Finance & Accounting Doi: 10.1111/jbfa.12859

We identify directors who experience a corporate bankruptcy and examine how this professional experience affects monitoring at the other firms where they concurrently sit on the board. Using a sample of US directors interlocked with firms that file for bankruptcy, we find that directors have a greater tolerance for real earnings management after a low-cost bankruptcy experience. This effect is stronger for independent directors and those who sit on the audit committee, consistent with a ratification and monitoring explanation. We do not find evidence consistent with the competing hypotheses that bankruptcy leads to directors' distraction or incentivizes efficient cost-cutting strategies. We contribute to the research on the influence of directors' corporate experience over corporate outcomes, by providing evidence suggesting that surviving a bankruptcy relatively unscathed lowers directors' perception of the severity of distress costs, with negative consequences for decision control.

Khalilov, Akram & Garcia Osma, Beatriz (2020)

Accounting conservatism and the profitability of corporate insiders

Journal of Business Finance & Accounting, 47(3-4), s. 333- 364. Doi: 10.1111/jbfa.12438 - Full text in research archive

We predict that accounting conservatism influences insiders' opportunities to speculate on good and bad news, and thus, insider trading profitability. We find that greater conditional (unconditional) conservatism is associated with lower (higher) insiders' profitability from sales. We find limited evidence that conservatism influences profitability from purchases. These findings are consistent with our hypotheses on the different informational roles of conditional and unconditional conservatism, and on the asymmetric influence of conservatism over the opportunities to speculate on good versus bad news. Our research design takes into consideration the endogenous nature of insiders' trading and conservatism. The results are robust to different measures of conservatism and a number of additional analyses.

Bleibtreu, Christopher; Khalilov, Akram & Königsgruber, Roland (2023)

Accounting institutions and the value of corporate political activity

[Academic lecture]. Annual Congress of the EAA.