Abstract
This study explores the relationship between accounting conservatism
and investment efficiency in the context of a developing country
Pakistan. The study used a sample of seventy six non financial firms
listed on KSE 100 index of Pakistan Stock Exchange for six years i.e.
from 2012 to 2017. The results reveal that both the conditional
accounting conservatism and non conditional accounting conservatism
have significant positive impact on investment decisions and firms
practicing accounting conservatism are least under or over invested.
Using conservative accounting identifies risky projects and projects
with negative Net Present Value (NPV) well ahead of time. Therefore it
helps shareholders to protect and enhance value of their investment. In
the same manner, agency problems can also be avoided if a firm
practices accounting conservatism
Arif Hussain, Romana Bangash, Syed Imran Khan, Sham Ur Rehman. (2017) Accounting Conservatism and Firm Investment Decisions: A Case of Pakistan, Journal of Managerial Sciences, Volume 11, Issue 3.
-
Views
519 -
Downloads
45
