Examining the Changes of Conservatism in Financial Reporting among TSE's firms over time

Review the literature of conservatism in financial reporting indicates the importance ofconservatism in accounting profession. The main purpose of this paper is to review the changes of accruals and Market-to-Book ratio over time in order to know the changes in financial reporting in Iran, because the evidence in the accounting literature shows conservatism in financial reporting increases over time. Due to the lack of a generally accepted definition of conservatism, some of conservatism proxies in financial reporting are definedand examined in this paper. This measures focus on the accumulation of non-operating accruals and Market-to-Book ratio. Statistical population of this research is the companies listed in Tehran Stock Exchange (TSE) since 2003 to 2011. After adjusting for outliers, sample consists of 116 companies. Although definitive conclusions is impossible, the existent evidence of financial reporting in TSE firms does not support the hypothesis of this paper and shows that the degree of conservatism in accounting has not increased over past decade.