The survey of relationship between somecorporate governance mechanisms and conservatism in financial Reporting

The aim of this research is survey the relationship between some corporate governance mechanisms and conservatism in financial reporting. Conservatism is potentially useful in corporate governance in several ways. First, it helps prevent excess payments to managers. Second it causes managers report loss of assets salled and discontinued operation. Finally, it provides managers with incentives to avoid taking on negative NPV projects. In this paper, conservatism, measured by two models, Basu (1997) and Roychowdhury and Watts (2006) and shares held by institutional investors, ownership concentration and board of directors independence have been considered as corporate governance mechanisms. Statistic population of research is firms listed in Tehran Stock Exchange and by using the omission sampling method, 60 firms listed in Tehran Stock Exchange, has been chosen during the years 1380 to 1387. By using the multiple regression test, results show there is no relationship between corporate governance mechanisms and conservatism in financial reporting. Certainly in this research some control variables effects has been considered.