1
PhD student, Accounting Department, Faculty of Economics and Social Sciences, Al-Zahrah University,
2
Accounting, Faculty of Social Sciences, Al-Zahra University, Tehran, Iran
10.22103/jak.2025.24087.4099
Abstract
Abstract
Objective: Accounting conservatism could affect the quantitative information on a financial statement. Accounting conservatism works as corporate governance and reduces agency costs. Conditional conservatism is accounting reporting processes that reduce the book value only in unfavorable conditions. In this paper, the authors focus on qualitative information on financial statements. The authors investigate the impact of accounting conservatism on financial report readability and use the FOG index to measure financial report readability.
Methods: This research, is a descriptive correlational study. The population research is all companies listed on the Tehran Stock Exchange. The resulting sample covers the fiscal years from 2017 to 2021. 129 companies were selected as a sample using a systematic screening method. Mltiple regression analyses have been used to test the hypotheses. Based on the theoretical foundation, this hypothesis was developed and tested:
H1: Accounting conservatism has a significant relationship with the financial reporting readability.
Results: The results show that accounting conditional conservatism has a negative and significant relationship effect on financial reports readability. If conservatism increases, the financial reports readability becomes weaker, as a result, the transparency and relevance of information decreases.
Conclusion: Evidence suggests that, applying procedures of accounting conditional conservatism leads to less readability of financial reports in Iranian companies. In other words, the existence of a conservative accounting system leads to a reduction in information provision and market understanding.
varmaziyar, N. and mashayekh, S. (2025). Investigating the impact of accounting conservatism on the financial reporting readability. Journal of Accounting Knowledge, (), -. doi: 10.22103/jak.2025.24087.4099
MLA
varmaziyar, N. , and mashayekh, S. . "Investigating the impact of accounting conservatism on the financial reporting readability", Journal of Accounting Knowledge, , , 2025, -. doi: 10.22103/jak.2025.24087.4099
HARVARD
varmaziyar, N., mashayekh, S. (2025). 'Investigating the impact of accounting conservatism on the financial reporting readability', Journal of Accounting Knowledge, (), pp. -. doi: 10.22103/jak.2025.24087.4099
CHICAGO
N. varmaziyar and S. mashayekh, "Investigating the impact of accounting conservatism on the financial reporting readability," Journal of Accounting Knowledge, (2025): -, doi: 10.22103/jak.2025.24087.4099
VANCOUVER
varmaziyar, N., mashayekh, S. Investigating the impact of accounting conservatism on the financial reporting readability. Journal of Accounting Knowledge, 2025; (): -. doi: 10.22103/jak.2025.24087.4099
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