Accounting conservatism is the tendency to require less evidence to recognize losses in the financial statements and … require a higher degree of evidence to recognize gains in the financial statements. Conservatism has been difficult to measure … on a firm by firm basis. This paper proposes a new measure of conservatism that uses income statement variables. Using …

This study assesses the relationship between the likelihood of future stock price crashes and conservatism … reveals that firms with a greater degree of conservatism witness a significant reduction in crash risk after accounting for … the literature on conservatism, revealing that conservatism diminishes the ability of managers to withhold unfavorable …