Journal of Iranian Accounting Review

Journal of Iranian Accounting Review

Investigation the impact of Accounting Conditional and Unconditional conservatism on the Stock Future Price Crash Risk: Banks and Insurance-level evidences

Document Type : Original Article

Author
Mohamad Hosein Ghalambor
Instructor of Accounting, Shahid Chamran University of Ahvaz, Ahvaz, Iran
10.22055/jiar.2018.26245.1234
Abstract
This study investigated the effect of accounting conservatism on stock future price crash risk for banks and insurance. For this purpose, two hypotheses were developed and with data of 27 banks and insurance listed on Tehran stock exchange during the period of 2010-2016 were examined. Accounting conservatism includes conservative and unconservative that has been used for their measurement by using the Khan Watts (2009) and Givoly & Hayn (2000) models, respectively. Finally, the research hypotheses were tested by using pooled data. The findings of this study suggest that conditional and unconditional conservatism has a negative and significant effect on the stock price crash risk. This means that accounting conservatism as a strategic mechanism limits management incentives and abilities to accelerate the disclosure of good news and delays in exposing bad news, thereby information asymmetry reduce and this will reduce stock future price crash risk for banks and insurance listed on Tehran stock exchange.
Keywords
accounting conservatism
Conditional Conservatism
Unconditional Conservatism
stock price crash risk
Journal of Iranian Accounting Review
Volume 5, Issue 18
Spring 2018
Pages 65-82