A study on relationship between earning conservatism with investment elasticity on Iranian firms

This paper presents an empirical investigation to see whether or not there is any relationship between profit conservatism and investment sensitivity and efficiency of investments in listed companies of Tehran Stock Exchange (TSE). Using regression analysis, the study investigates whether there is any relationship between conservatism and sensitivity of investments, between profit conservatism and efficiency of company’s investments and between conservatism ability to create profit and cash in accepted TSE firms. The study chooses a sample of 102 firms from TSE market over the period 2005-2011 and the results confirmed that there were positive and meaningful relationship between all variables of the survey (? = 5%).