Productivity Management Studies

Corporate social responsibility and accounting conservatism emphasizing the readability of financial reports

Document Type : Original Article

Authors

1 Assistant Professor, Accounting, University of Kurdistan, Sanandaj, Iran.

2 Master’s student, Accounting, University of Kurdistan, Sanandaj, Iran.

Abstract

The level of accounting conservatism and corporate social responsibility (CSR) can be seen as a company's effort to enhance effective communication with its stakeholders. The objective of this study is to examine the impact of corporate social responsibility on accounting conservatism, with an emphasis on the readability of financial reports. This research is categorized as descriptive-correlational in terms of its method and nature. The study investigates data from 136 listed companies on the Tehran Stock Exchange between the years 2012 and 2020. The results of the study show a significant negative relationship between CSR and conditional conservatism, supporting the agency theory. According to this theory, a stakeholder-oriented company may face fewer agency problems, and thus shareholders may demand less conservatism. Furthermore, there is a significant positive relationship between CSR and unconditional conservatism, which supports stakeholder theory. This theory suggests that companies engaging in CSR activities to maintain relationships with stakeholders tend to increase conservative actions. Additionally, the moderating variable strengthens the negative relationship between CSR and conditional conservatism, while it weakens the positive relationship between CSR and unconditional conservatism. 

Keywords

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Productivity Management Studies
Volume 1, Issue 1
January 1404
Pages 23-38