Document Type : Research Paper
Abstract
This study aims to explain how adverse experiences influence corporate accounting behavior and financial reporting by utilizing the theories of adaptive learning and imprinting.Therefore, the primary objective of this research is to examine the impact of adverse accounting events on financial reporting quality and the mediating role of accounting conservatism in this relationship.
This research is applied in terms of purpose and is classified as descriptive-correlational research in terms of implementation. In this regard, in order to test the research hypotheses, data related to 138 member companies of Tehran Stock Exchange were collected during the years 2012 to 2013 and analyzed using multivariate regression models in Stata software.
The results indicate that adverse accounting events have a positive and significant impact on financial reporting quality. Furthermore, this effect is strengthened through increased accounting conservatism. Additionally, accounting conservatism acts as a key mediating variable in the relationship between adverse experiences and financial reporting quality.
Companies, by learning from past adverse experiences, tend to adopt more cautious policies in accounting and financial reporting. This approach not only enhances financial reporting quality but also mitigates negative outcomes associated with accounting practices. Accounting conservatism serves as a critical factor in reducing risk and increasing the transparency of financial information.
This research contributes to understanding the relationship between adverse experiences, accounting conservatism, and financial reporting quality. It sheds light on the role of these factors in shaping corporate accounting behavior.The findings can assist managers in adopting conservative policies to improve reporting quality and reduce risks.
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