Investigating the Effect of Moderating Managerial Ability on the Relationship between Investor Sentiment and Accounting Conservatism

Objective: Accounting conservatism, as a factor that leads to the timely identification of bad news and the delay of good news, is able to control and to some extent reduce the investor sentiment. Therefore, it is expected that with the change in the level of the investor sentiment, the level of acc...

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Autores principales:	Yahya Kamyabi, Amir Javady Nia
Formato:	article
Lenguaje:	FA
Publicado:	University of Tehran 2021
Materias:	managerial ability accounting conservatism investor sentiment Accounting. Bookkeeping HF5601-5689 Finance HG1-9999
Acceso en línea:	https://doaj.org/article/efc0e9cbddd240868e329de5a60d2360
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spelling	oai:doaj.org-article:efc0e9cbddd240868e329de5a60d23602021-11-14T05:27:56ZInvestigating the Effect of Moderating Managerial Ability on the Relationship between Investor Sentiment and Accounting Conservatism2645-80202645-803910.22059/acctgrev.2021.307335.1008411https://doaj.org/article/efc0e9cbddd240868e329de5a60d23602021-05-01T00:00:00Zhttps://acctgrev.ut.ac.ir/article_80782_f380ccbc4ffa283d7b17a35f9c914bf1.pdfhttps://doaj.org/toc/2645-8020https://doaj.org/toc/2645-8039Objective: Accounting conservatism, as a factor that leads to the timely identification of bad news and the delay of good news, is able to control and to some extent reduce the investor sentiment. Therefore, it is expected that with the change in the level of the investor sentiment, the level of accounting conservatism will also change. However, the use of conservatism to control the investor sentiment under factors such as the efficiency of the management unit of the economic unit. In other words, management ability can moderate the relationship between investor sentiment and conservatism. Accordingly, this study aims to examine the moderating effect of management ability on the relationship between investor sentiment and accounting conservatism. Methods: To achieve the purpose of the research, a statistical sample including 135 companies listed on the Tehran Stock Exchange during the years 2014 to 2018 has been selected. And to test the hypothesis, combined data with ordinary least squares regression model have been used. Results: The findings of this study show that there is a positive and significant relationship between investor sentiment and accounting conservatism. In other words, in periods when the stock market is associated with the investor sentiment, firms use conservative mechanisms. Accounting is done to deal with this behavioral process of investors. In addition, the research findings indicate that managerial ability does not play a moderating role in the relationship between investor sentiment and conservatism. Conclusion: The results of the study show that when the investor sentiment intensifies, in order to prevent and reduce this behavioral bias, firms provide faster bad news and early identification of economic losses, as well as delay good news and more strict recognition of returns. To avoid future problems caused by investment feelings to some extent. In addition, the able manager uses accounting conservatism against investor sentiment to the same extent as other managers. In other words, management ability cannot affect the relationship between investor sentiment and accounting conservatism. Hence, our study extends the literature on the impact of management ability on the relationship between investor sentiment and accounting conservatism and the conclusions have important implications for the improvement of Iran’s market efficiency.Yahya KamyabiAmir Javady Nia University of Tehranarticlemanagerial abilityaccounting conservatisminvestor sentimentAccounting. BookkeepingHF5601-5689FinanceHG1-9999FAبررسی‌های حسابداری و حسابرسی, Vol 28, Iss 1, Pp 102-134 (2021)
institution	DOAJ
collection	DOAJ
language	FA
topic	managerial ability accounting conservatism investor sentiment Accounting. Bookkeeping HF5601-5689 Finance HG1-9999
spellingShingle	managerial ability accounting conservatism investor sentiment Accounting. Bookkeeping HF5601-5689 Finance HG1-9999 Yahya Kamyabi Amir Javady Nia Investigating the Effect of Moderating Managerial Ability on the Relationship between Investor Sentiment and Accounting Conservatism
description	Objective: Accounting conservatism, as a factor that leads to the timely identification of bad news and the delay of good news, is able to control and to some extent reduce the investor sentiment. Therefore, it is expected that with the change in the level of the investor sentiment, the level of accounting conservatism will also change. However, the use of conservatism to control the investor sentiment under factors such as the efficiency of the management unit of the economic unit. In other words, management ability can moderate the relationship between investor sentiment and conservatism. Accordingly, this study aims to examine the moderating effect of management ability on the relationship between investor sentiment and accounting conservatism. Methods: To achieve the purpose of the research, a statistical sample including 135 companies listed on the Tehran Stock Exchange during the years 2014 to 2018 has been selected. And to test the hypothesis, combined data with ordinary least squares regression model have been used. Results: The findings of this study show that there is a positive and significant relationship between investor sentiment and accounting conservatism. In other words, in periods when the stock market is associated with the investor sentiment, firms use conservative mechanisms. Accounting is done to deal with this behavioral process of investors. In addition, the research findings indicate that managerial ability does not play a moderating role in the relationship between investor sentiment and conservatism. Conclusion: The results of the study show that when the investor sentiment intensifies, in order to prevent and reduce this behavioral bias, firms provide faster bad news and early identification of economic losses, as well as delay good news and more strict recognition of returns. To avoid future problems caused by investment feelings to some extent. In addition, the able manager uses accounting conservatism against investor sentiment to the same extent as other managers. In other words, management ability cannot affect the relationship between investor sentiment and accounting conservatism. Hence, our study extends the literature on the impact of management ability on the relationship between investor sentiment and accounting conservatism and the conclusions have important implications for the improvement of Iran’s market efficiency.
format	article
author	Yahya Kamyabi Amir Javady Nia
author_facet	Yahya Kamyabi Amir Javady Nia
author_sort	Yahya Kamyabi
title	Investigating the Effect of Moderating Managerial Ability on the Relationship between Investor Sentiment and Accounting Conservatism
title_short	Investigating the Effect of Moderating Managerial Ability on the Relationship between Investor Sentiment and Accounting Conservatism
title_full	Investigating the Effect of Moderating Managerial Ability on the Relationship between Investor Sentiment and Accounting Conservatism
title_fullStr	Investigating the Effect of Moderating Managerial Ability on the Relationship between Investor Sentiment and Accounting Conservatism
title_full_unstemmed	Investigating the Effect of Moderating Managerial Ability on the Relationship between Investor Sentiment and Accounting Conservatism
title_sort	investigating the effect of moderating managerial ability on the relationship between investor sentiment and accounting conservatism
publisher	University of Tehran
publishDate	2021
url	https://doaj.org/article/efc0e9cbddd240868e329de5a60d2360
work_keys_str_mv	AT yahyakamyabi investigatingtheeffectofmoderatingmanagerialabilityontherelationshipbetweeninvestorsentimentandaccountingconservatism AT amirjavadynia investigatingtheeffectofmoderatingmanagerialabilityontherelationshipbetweeninvestorsentimentandaccountingconservatism
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Investigating the Effect of Moderating Managerial Ability on the Relationship between Investor Sentiment and Accounting Conservatism

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