Identifying Accounting Conservatism – A Literature Review

AbstractWe note that beginning with 1995 accounting conservatism aroused a particular interest to researchers. All presented papers point out the presence of accounting conservatism in varying degrees, none of them mentioning its lack. Most often, the topics approached in the accounting conservatism research haven’t been exhausted in a single paper, but have been transmitted over years from author to author and from paper to paper. Sometimes, researchers have followed paths which although have proved viable in their study, they haven’t been validated by economic reality, a fact signaled by those who subsequently have resumed the respective topics. In our review we presented papers regarding definition and measures of accounting conservatism, conditional and unconditional conservatism, alternative explanations for conservatism and accounting conservatism in varied legal settings. Accounting conservatism, sometimes renamed, sometimes unnamed at all in the legal regulations, will be found however within them, as long as the component of uncertainty will accompany the activity of a firm