Cross sectional variation in cash flow asymmetric timeliness and its effect on conditional conservatism

Document Type : Research Paper


1 Prof., Accounting Department, Faculty of Economics and Social Sciences, Shahid Cahmran University, Ahvaz, Iran

2 Ph.D. Candidate in Accounting, Faculty of Economics and Social Sciences, Shahid Cahmran University, Ahvaz, Iran


The current study aims to review the cross sectional variation in cash flow asymmetric timeliness and its effect on conditional conservatism. In this study, data from 120 firms in Tehran Stock Exchange for the period spanning 1384- 1390 were examined. The regression model used in this research is panel data method with fixed effects approach. The most common measure of conditional conservatism in accounting is asymmetry timeliness in recognizing profits and losses. Nevertheless, this measure combines both asymmetry timeliness of accruals and cash flows from operation. Given that asymmetry timeliness of operating cash flow does not belong to the domain of profits and losses, it causes variation in the test of conservative. In this research, with respect to good and bad news, it was shown that asymmetry timeliness of operating cash flow is cross sectionally  different with lifecycle variable of company (size, age, growth and capital expenditure). The results show that conservatism is higher in the early stages of the company lifecycle.


Main Subjects

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