Journal of Iranian Accounting Review

Journal of Iranian Accounting Review

Investigating the Impact of Life Cycle on the Conservative Financial Reporting of the Companies Listed on the Tehran Stock Exchange

Document Type : Original Article

Authors
Gholamhossein Mahdavi 1
Leila Kanani 2
1 Professor of Accounting, Shiraz University, Shiraz, Iran
2 M.A. in Accounting, International Campus of Shiraz University, Shiraz, Iran
10.22055/jiar.2018.21425.1106
Abstract
The purpose of this research is examining the effect of life cycle on the conservative financial reporting of the companies listed on the Tehran Stock Exchange. The sample of the research consists of 1030 firm-year observations related to 103 companies listed on the Tehran Stock Exchange between the time span from 2006 to 2015. To measure life cycle, the model of Anthony and Ramesh (1992), and to measuring conservatism, Khan and Watts, (2009) model have been used. In analyzing the research hypotheses, SPSS Version 20 and Eviews Version 9 have been used. The results derived from testing the research hypotheses by using the panel data suggest that the different stages of companies’ life cycle including growth, maturity and decline have an effect on conservatism, and as a result the conservatism situation changes in the different stages of life cycle. In this way, the conservatism rate in the decline stage of life cycle is higher than the growth and maturity stages of life cycle; also, in the maturity stage, conservatism is higher than the growth stage.
Keywords
Life cycle
Conservatism
Bad news and good news
Journal of Iranian Accounting Review
Volume 4, Issue 15
Summer 2017
Pages 113-134