You can view the full text of this article for free using the link below.

Title: The effect of cash flow information asymmetry criteria on conservatism in Iran

Authors: Mahdi Salehi; Horta Azimi

Addresses: Department of Accounting, Ferdowsi University of Mashhad, Mashhad, Iran ' Islamic Azad University, Birjand Branch, Birjand, Iran

Abstract: The current study aims to investigate the effect of cash flow information asymmetry on conditional and unconditional accounting conservatism of the listed companies on Tehran Stock Exchange. Furthermore, we attempt to explore the determinant factors on these associations. The financial information of 143 firms listed on the Tehran Stock Exchange for the period of 2012 to 2016 was gathered. In order to assess conditional conservatism Basu's (1997) model has been used, and to evaluate the relationship between conditional asymmetry and cash flow information asymmetry control variables of lifecycle have been added to Basu model. The results indicate that there is no relationship between conditional conservatism and cash flow information asymmetry as well as firm lifecycle variables, which is used to assess unconditional conservatism, and cash flow information asymmetry. Furthermore, we find no allocative factor on the relationship between accounting conservatism and cash flow information asymmetry. This is the first investigation that is dealt with cash flow asymmetry and both types of accounting conservatism separately in emerging economies.

Keywords: conditional conservatism; unconditional conservatism; firm lifecycle; information asymmetry; Iran.

DOI: 10.1504/AAJFA.2022.121751

Afro-Asian Journal of Finance and Accounting, 2022 Vol.12 No.1, pp.105 - 128

Accepted: 10 Sep 2019
Published online: 07 Apr 2022 *

Full-text access for editors Access for subscribers Free access Comment on this article