This study investigates whether conservatism in financial reporting has the ability to predict stock price crash risk. The statistical population of the study is the companies listed in Tehran Stock Exchange (TSE). Using a sample of 580 firm–years over the period of 2006-2010, we find that accounting conservatism, as measured by the Givoly and Hayn (2007) CSCORE, reduces the likelihood of a firm experiencing stock price crashes.
Generally, our results are consistent with the notion that accounting conservatism effectively curbs managerial incentives to withhold bad news and/or delay its release to outside investors, and thus deters negative information stockpiling up to a tipping point, thereby reducing stock price crash risk.
Meshki,M and Fattahi,R . (2012). The Effect of Accounting Conservatism on The Reduce of Stock Price Crash Ri. Quarterly Journal of Securities Exchange, 4(16), 119-136.
MLA
Meshki,M , and Fattahi,R . "The Effect of Accounting Conservatism on The Reduce of Stock Price Crash Ri", Quarterly Journal of Securities Exchange, 4, 16, 2012, 119-136.
HARVARD
Meshki M, Fattahi R. (2012). 'The Effect of Accounting Conservatism on The Reduce of Stock Price Crash Ri', Quarterly Journal of Securities Exchange, 4(16), pp. 119-136.
CHICAGO
M Meshki and R Fattahi, "The Effect of Accounting Conservatism on The Reduce of Stock Price Crash Ri," Quarterly Journal of Securities Exchange, 4 16 (2012): 119-136,
VANCOUVER
Meshki M, Fattahi R. The Effect of Accounting Conservatism on The Reduce of Stock Price Crash Ri. Quarterly Journal of Securities Exchange. 2012;4(16):119-136 (In Persian).
