A Model for Measuring Conservatism in Risk Disclosure Based on Disclosure Tone
Subject Areas : Journal of Investment Knowledge
Ramin Mehradi
1
(Ph.D. Student , Department of Accounting, Tabriz Branch, Islamic Azad University, Tabriz, Iran)
younes badavar nahandi
2
(Associate professor, Department of Accounting, Tabriz Branch, Islamic Azad University, Tabriz, Iran)
Mehdi Zeynali
3
(Assistant Professor, Department of Accounting, Tabriz Branch, Islamic Azad University, Tabriz, Iran)
Rasoul Baradaran Hasanzadeh
4
(Associate Professor, Department of Accounting, Tabriz Branch, Islamic Azad University, Tabriz, Iran)
Keywords: Firm Characteristics, Risk Disclosure Tone, Conservative Risk Disclosure, Downside Risk,
Abstract :
In firms with conservative risk disclosure more validity is needed to disclose good risk news and a lower standard of validity is needed to disclose bad risk news.The purpose of this study is to present a model for measuring conservatism in risk disclosure(CRD) considering the specific characteristics of firms. The statistical population of the study is the firms listed on the Tehran Stock Exchange and the period is from the beginning of 2009 until the end of 2018. To this end, using a possible asymmetric relationship between downside risk and risk disclosure tone, a model was developed to measure CRD. The model estimates showed that managers were conservative in disclosing risk information. Also in order to provide a model for measuring CRD to a firm over a specific time period, three features of financial leverage, growth opportunities and institutional ownership after the essential test were added to the baseline model and this model was adapted to the specific characteristics of the firms. The model estimates that financial leverage and growth opportunities increase CRD and decreases its institutional ownership.
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