Conservative accounting and balance between reliability and relevance of accounting earnings

Subject Areas :

بهمن  Banimahd ¹ (استادیار دانشگاه آزاد واحد کرج)
حیدر  AFROZI ² (دانشجوی کارشناسی ارشد دانشگاه آزاد اسلامی واحد تهران جنوب)

Received: 2015-05-10 Accepted : 2015-05-10 Published : 2011-02-20

Keywords:

Abstract :

In this paper, we examine relation between relevance and reliability of accounting information and accounting conservatism over a 7- period in 103 loss firms during the period 2002 to 2008 in Tehran Stock Exchange. We report evidence that accounting conservatism has a positive relation with reliability and a negative relation with relevance. our findings show that relevance and reliability have a negative relation. The other results show that firm size is related to reliability and relevance but leverage is not related to relevance and has a positive relation with reliability. our findings contribute to the literature on accounting conservatism and they implicate that conservatism is not likely to be an efficient financial reporting mechanism to tradeoff between relevance and reliability.

References:

 

ادهم، ذاکر، (1386)، " رابطه بین محافظه کاری حسابداری، بازده سهام و کیفیت سود "، پایان نامه کارشناسی ارشد رشته حسابداری، دانشگاه آزاد اسلامی واحد علوم و تحقیقات تهران.

بنی مهد، بهمن، (1385)، " تبیین و ارائه الگو برای اندازه گیری محافظه کاری حسابداری"، رساله دکتری رشته حسابداری، دانشگاه آزاد اسلامی واحد علوم و تحقیقات تهران.

رضا زاده، جواد و عبداله آزاد، (1387)، " رابطه بین عدم تقارن اطلاعاتی و محافظه کاری در گزارشگری مالی"، فصل نامه بررسی های حسابداری و حسابرسی، شماره 54، 80-63.

کردستانی و امیر بیگی، (1387)، " محافظه کاری در گزارشگری مالی: بررسی رابطه عدم تقارن زمانی سود و MTB  به عنوان دو معیار ارزیابی محافظه کاری "، فصل نامه بررسی های حسابداری و حسابرسی، شماره 52، 106- 89.

کمیته تدوین استاندارد های حسابداری، (1387)، " استانداردهای حسابداری "، نشریه شماره 160، انتشارات سازمان حسابرسی، 679 – 680.

 

Ahmed, A. S., Billings, B. K., Morton, R. M.,(2002), and Stanford-Harris, M. "The Role of Accounting Conservatism in Mitigating Bondholder-Shareholder Conflicts Over Dividend Policy and in Reducing Debt Costs", The Accounting Review, 77(4), 867-890.

Ahmed,A, S, Scott Duellman, (2008), "Evidence on the Role of Accounting conservatism in Monitoring Managers' Investment" AAA Financial Accounting and Reporting Section. Arailable at: www.ssrn.com.

Ball, R, Kotari, S.P. and A.Robin,(2000), "The Effect of International Institutional Factors on Properties of Accounting Earnings", Journal of Accounting and Economics, No.29, 1-51.

Basu, S. (1997), "The Conservatism Principle and The Asymmetric Timeliness Earnings", Journal of Accounting & Economics, No24, 3-37.

Beaty Anne, Wber Joseph, Jiewei Yu Jeff (2008), "Conservatism and Debt", Arailable at:  www.ssrn.com.

Feltham, G. and Ohlson, J. A.,(1995), "Valuation and Clean Surplus Accounting for Operating and  Financial Activities", Contemporary Accounting Research, 11(2), 689–731.

García Lara, J. M. and Mora, A. (2004), "Balance Sheet Versus Earnings Conservatism in Europe", European Accounting Review, 13(2), 261-292.

García Lara,Beatriz G.Osma, Fernando Penalva (2006), "Cost of Equity and Accounting Conservatism", IESE Business School, University of Navara.

Givoly, D., C. K. Hayn, and A. Natarajan. (2007), "Measuring Reporting Conservatism", The Accounting Review 82 (1),65-106.

Givoly, D. and Hayn, C. (2000), "The Changing Time-Series Properties of Earnings, Cash Flows and Accruals: Has Financial Reporting Become More Conservative?", Journal of Accounting and Economics, 29(3), 287-320.

Huang chee - Alen and Jha Rajini, (2009), "Accounting Conservatism and the Tradeoff between Relevance and Reliability of Cureent Earnings".

LaFond, W., and R. L. Watts. (2008), "The information role of conservatism" The Accounting Review  Vol. 83 Issue 2, 447-478.

Nikolaev, V, (2008), "Debt Covenants and Accounting Conservatism: Complements or Substitutes?", Arailable at: www.ssrn.com.  

Penman, S. H. and Zhang, X. J. (2002), "Accounting Conservatism, Quality of Earnings, and Stock Returns", The Accounting Review, 77(2), 237-264.

Qiang, X., (2007), "The Effects of Contracting, Litigation, Regulation, and Tax Costs on Conditional and  Unconditional Conservatism: Cross-Sectional Evidence at the Firm Level", Accounting Review 82, 759-796.

Ryan, S. (2006), "Identifying Conditional Conservatism", European Accounting Review 15 (4), 511-525.

Watts Ross & Zimmerman Jerold, (1978), "Towards a Positive Theory of the Determinants of Accounting Standards", The Accounting Review, Vol LIII,No 1.

Watts, R. L., (2003), "Conservatism in Accounting, Part I: Explanations and Implications", Accounting Horizons, 17(3), 207-221.