This paper examines the effect of accounting conservatism on firm-level investment during the 2007-2008 global financial crisis. Using a differences-in-differences design, we find that firms with less conservative financial reporting experienced a sharper decline in investment activity following...

Financial statements are the main part of financial reporting process. Purpose of financial statements is providing classified information about the financial situation, financial performance, and financial flexibility for the business unit that can be useful in a wide range of users of...

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...

This paper investigates the impact of investor sentiment on conditional accounting conservatism. We find that companies recognize economic losses more (less) timely in earnings during periods of high (low) investor sentiment. Further, the sentiment-conservatism relationship is stronger for firms...