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IMPACT OF THE FINANCIAL CRISIS ON ACCOUNTING CONSERVATISM

Rim El Houcine

Abstract: This paper analyzes the financial crisis effect on French companies accounting conservatism. The study is conducted on a sample of 120 French firms, observed from the year 2005 to 2009. We used the Basu model (1997) to test the effect of the financial crisis on the level of accounting conservatism pre-crisis (2005-2007) and during the crisis (2008-2009). The results showed that companies during the crisis period are not conservative. Managers will tend to be more aggressive by reporting the good news and delaying the recognition of the bad. The effect of the financial crisis is still an important topic to study. In that regard, this study is important. It contributes to the understanding of the relationship between accounting conservatism and financial crisis. The main limitation of the present study is that it limited to the effects in Frensh listed companies.
Keywords: French / model / FINANCIAL CRISIS ON ACCOUNTING CONSERVATISM / companies

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