The study of the relationship between conservatism in financial reporting and stock liquidity

Abstract

The main objective of the present research is to study the relationship between conservatism in financial reporting, and stock liquidity. In this study, conservatism in financial reporting is considered as the independent variable, and the 13 criteria of stock liquidity are used as the dependent variables. The study period is of 7 years, and includes the period between the beginning of 2003 until the end of 2010 in terms of the solar calendar (i.e. March 2003 to March 2010). The statistical sample includes 70 companies from various industries. The data are collected using the library method. A univariate regression model is used to test the study hypotheses, and the estimations are performed in the form of panel data. The results of hypothesis testing indicate that there is no significant relationship between conservatism in financial reporting, and stock liquidity indices.