Role of Accounting Conservatism on the Quality of Financial Statements

Hamidreza Kordlouie, Faramarz Mohammadi, Nader Naghshineh, Mehdi Tozandejani

Abstract


This study is an attempt at investigating the relationship between accounting conservatism and the quality offinancial statements of the companies accepted in Tehran Stock Exchange (TSE) market. Accountingconservatism is measured through GULIHINE model, while BIDEL, HILLARY, AND VERDI’s (2008) modelis used for assessing the financial statement quality. Through an experimental method, this study presents theconsumers of the accounting information—including market analysts, brokers, managers, and etc- the importanteffect of accounting conservatism on the financial statements of the companies.

Using the financial statement of 102 companies accepted in TSE market in a period of time, between 2006 and2010, it was apparent that there is a significantly positive relationship between accounting conservatism and thequality of financial reports.


Full Text: PDF DOI: 10.5539/ijbm.v9n1p129

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This work is licensed under a Creative Commons Attribution 3.0 License.

International Journal of Business and Management   ISSN 1833-3850 (Print)   ISSN 1833-8119 (Online)

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