The recent financial crisis has stimulated a renewed interest in understanding the determinants of stock price crash risk (i.e., left tail risk). Recent research shows that opaque financial reports enable managers to hide and accumulate bad news for extended periods. When the accumulated bad...

Using a large sample of U.S. firms over the period 1964–2007, we find that conditional conservatism is associated with the lower likelihood of a firm's future stock price crashes. This finding holds for multiple measures of conditional conservatism and crash risk and it is robust to...