Empirical Studies in Financial Accounting

Abstract In the age that firms deal with various challenges, financial safety and the
Factors which end with recession are of great importance. Along with the
fact mentioned, the present study considers the investigation of the effect of
conditional conservatism and accounting-based earnings attributes on risk of
bankruptcy in Firms Listed at the Tehran Stock Exchange. The Z’altman is
used for measuring the risk of bankruptcy and accruals quality, earnings
persistence, earnings predictability, and earnings smoothness used for
measuring the Accounting-based Earnings Attributes.The results of
estimating of research hypotheses using the panel data techniques in eviews
software for 126 firm of Tehran’s Stock Exchange during a period of five
years from 2010 To 2014, suggest that not only using the accounting
conditional conservatism does not make any important change in decreasing
of risk of bankruptcy, but also it is able to increase the financial distress of
Iranian firms. Also, the result show the significant negative relation between
the accounting-based earnings attributes (Accruals quality, persistence and
predictability) with risk of bankruptcy of firms. Generally, The results reveal
that risk of bankruptcy of firms are mostly influenced by economical
condition of the country, the politics of financing, the size of the firms, the
sort of industry ,and improvement of accounting-based earnings attributes
rather than conditional conservatism approaches.