Document Type : Research Paper

Authors

• Ali Saghafi
• Mehdi Sadidi

Abstract

Economic decision-making needs information; lack of information results ambiguity of decision. Financial reports provide most of the information needed in process of decision-making (D-M). Previous researches indicate that the accounting earning (AE) is the sole and the most used item of accounting information in economic DM, therefore the earning quality (EQ) is very important to investors and creditors.
This research study indicates the effect of accounting conservatism to the earning quality and stock return. The result shows that some of the changes in Return on Asset (ROA) can be using conservatism procedures, which reduce quality of earning.

Keywords

• Conservative accounting
• Earning quality
• Return of operating Asset
• Return of stock