Accounting and Auditing Research

Accounting and Auditing Research

The effect of the manager's conservatism on the company's financial policies

Document Type : Original Article

Authors
1 Acconting Department, Acconting. Tabaran University, Mashhad, Iran
2 Department of Finance, Tabaran University, Mashhad , iran
3 Department of Finance, Mashhad Branch, Islamic Azad University, Mashhad , iran
10.22034/iaar.2025.517480.1842
Abstract
Financial policies of companies include profit-sharing policy, cash retention policy and capital expenditure policy. The main purpose of this research is to investigate the impact of managerial conservatism on the financial policies of companies listed on the Tehran Stock Exchange. Firms with conservative CEOs are more likely to engage in capital expenditure investments, less likely to engage in R&D investments, more likely to hold cash, less likely to pay cash dividends, more likely to engage in share buyback plans, and they are less likely to finance their operations through debt. The current research method is applied in terms of purpose and correlation-regression analysis in terms of method. The statistical population of this research includes the companies accepted in the Tehran Stock Exchange, and systematic screening or elimination method was used to select the sample. Therefore, in the current research, a sample including 119 companies during the years 2014 to 2021 has been studied at the overall level and at the level of industries. The research results show that there is a positive and significant relationship between managerial conservatism and cash retention, and a negative and significant relationship between managerial conservatism and capital expenditures. Also, there is no significant relationship between managerial conservatism and profit-sharing policy. In this research, the dependent variable is the financial policies of companies, measured by the criteria of cash retention policy, capital expenditure policy and profit-sharing policy. The independent variable of the research is management conservatism, which was measured by evaluating the type of signature of
Keywords

Subjects



Articles in Press, Accepted Manuscript
Available Online from 08 September 2025