ارزيابي ارتباط بين سود و زيان و ترازنامه از ديدگاه محافظه كاري در گزارشگري مالي

Evaluation of relation ship between income and balance sheet from conservation financial

Defining earnings conservatism as the degree to which a firmʹs earnings are more timely in reflecting expected losses than gains in a given fiscal year, and balance sheet conservatism as the firmʹs market-to-book ratio at the beginning of the year. In this research used financial statements information and stock prices of the 122 firms (as 1098 firm-year observations) listed in Tehran Stock Exchange for sample, over a period of 9 years from 1997 through 2007, And data analyzed by regression models, we hypothesize and find: (1) Earnings conservatism is negatively associated with balance sheet conservatism. (2) The negative link between earnings conservatism and balance sheet conservatism is primarily due to the accrual component of earnings, not the operating cash flow component of earnings. Since our hypotheses stem from Wattsʹ (2003) explanations for accounting conservatism, our results are consistent with his explanations. Our results imply that incorporating the link between earnings conservatism and balance sheet conservatism is essential if one uses earnings-returns associations to investigate cross-sectional or time-series differences in earnings conservatism. To test this implication, we revisit a prior study that inferred changes in earnings conservatism over time but did not incorporate the link between earnings conservatism and balance sheet conservatism in its research design. We find that including the link greatly enhances the inferences available from that prior study.