The Impact of Managerial Caution on Operating Performance and Accounting Conservatism

Document Type : Research Paper


1 Associate Prof. Accounting, University of Isfahan, Iran

2 Assistant Prof, University of Isfahan, Iran

3 MA., University of Isfahan, Iran


The aim of this research is investigate impact of the
managerial caution on the operational performance and accounting
conservatism. To evaluate operational performance, three criteria are
used: Return on Assets (ROA), Return on Equity (ROE), and
Operating Profit Margin (OPM). Also, in order to measure accounting
conservatism, Basu's model (1997) has been used. The data used
include a sample consists of 110 listed companies in Tehran Stock
Exchange (TSE) during the years 2003 to 2012. For data analysis and
hypothesis testing, multivariate regression model and the model of
pooled data is used. The results of estimating research models suggest
that managerial caution has a positive effect on ROA and OPM, and
negative effect on accounting conservatism. The research results also
attest that between managerial caution and ROE, there is no
statistically significant relationship.