The Conservatism in Accounting and Its Effect on Earnings Response Coefficient in Tehran Stock Exchange Listed Companies

Abstract

The main purpose of this research is to investigate the relationship between conservatism and earnings response coefficient. For conservatism the book-to-market ratio and for measurement of earnings management Ohlson's valuation model is used. The statistic population of the research includesthe listed companies in Tehran Stock Exchange and the samples include 154 companies over the period of 2007 to 2012. Using the panel regression analysis, several models have been estimated and the hypotheses have been examined. Results show that there is negative and significant relationship between conservatism and earnings response coefficient.