Conservative accounting and balance between reliability and relevance of accounting earnings

Subject Areas :

بهمن Banimahd ¹ , حیدر AFROZI ²

1 - استادیار دانشگاه آزاد واحد کرج
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.

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