Thesis (M.Sc.) - Cairo University - Faculty of Graduate Studies for Statistical Research - Department of Bio-statistics and Demography

The objective of this study is to investigate the firm and country characteristics and their relative importance that influence the level of accounting conservatism. A sample of 5470 publicly listed firms from 55 countries during the period 2017-2019 provides the data for the analysis. Both conditional and unconditional conservatism are investigated. The results reveal that country differences explain approximately 31 percent of the variance in the level of unconditional conservatism. Thus, firm characteristics are superior in explaining cross-country variance in the level of accounting conservatism.The results reveal that unconditional conservatism is higher in countries that exhibit higher governance quality and lower in economically free countries and countries with high socioeconomic conditions. Additionally, both accounting regulations and tax growth significantly influence the level of unconditional conservatism.On the contrary, countries with highly leveraged firms are more likely to exhibit higher conditional conservatism. Moreover, conditional conservatism tends to be lower in countries that exhibit higher governance quality. In addition to the fact that both dimensions of conservatism are important, both have unique extra country-level influences.This study explores the variations in the quality of earnings across listed firms by comparing the impact of country-level governance, economic, and socioeconomic characteristics on accounting practices, which may have significant implications for regulators, standards setters, and corporate governance.The findings provide insights into financial accounting research in several ways. First, it extends the accounting literature on country's effects by quantifying the impact of a country's characteristics on accounting conservatism. Second, to the best of the author's knowledge, this is the first study that uses multilevel analysis to investigate the relative importance of firm and country-level characteristics on the level of conservatism

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