Document Type : Research Paper

Authors

• A. Kbodamipour
• R. Mahroomi

Abstract

The purpose of this study is to investigate the existence of conservatism and its effect on value relevance of accounting information. The methodology of present study is quasi experimental. The statistical society includes companies accepted in Tehran Stock Exchange, and the time span of the study is from the beginning of 2000 up to the end of 2008.  The Basu Model was exploited for investigating and assessment of the extent of conservatism in sample companies and for the investigation of value relevance of accounting information, the present study made use of Easton & Harris Model. The   results   are   indicative   of   the   presence   of   conservatism. Furthermore it was observed that as we descend from companies with low conservatism to companies with medium conservatism, the value relevance of accounting information increases; although the mentioned increase is not perceptible, value relevance of accounting information decreases a great deal when moving from companies, medium in conservatism toward companies with high conservatism. Consequently there cannot be found a clear relevance between conservatism and value relevance of accounting information.

Keywords

• Conservatism
• Accounting Information
• Value Relevance
• Accounting Earnings