Accounting and Auditing Research

Accounting and Auditing Research

Macroeconomic performance impact on the Accounting conservatism and information content of accounting earnings in Tehran Stock Exchange companies

Document Type : Original Article

Authors
Vahid Ahmadian 1
Hosein Etemadi 2
Mohamad Ali Aghaei 2
1 Ph.D. Student, Tarbiat Modares University (TMU), Tehran, Iran
2 Associate Professor in Accounting, Tarbiat Modares (TMU), Tehran, Iran
Abstract
Accounting literature suggests that economic conditions in response to good news and bad news related to the company's investors affect and this leads to a change in the behavior of corporate financial reporting. In this study, aspects of the business cycle is taken into consideration and Accounting conservatism the information content of accounting earnings reaction to changes in the business cycle is examined. The sample consists of 145 companies listed in Tehran Stock Exchange for the years 1381 to 1393 are based on weighted average of the total market was divided into periods of boom and bust. The results based on the model, developed by Basu for accounting conservatism and Harris Aston model for the information content of accounting earnings indicate that test the hypothesis that these two variables react to changes in economic conditions. Also during the recession than in boom periods, more accounting conservative had been applied.
Keywords
Accounting Conservatism
Value Relevance of Earnings
Business Cycles
Accounting and Auditing Research
Volume 10, Issue 38
Summer 2018
Pages 145-164