Accounting conservatism and financial performance through book value: Evidence from manufacturing enterprises listed in Vietnam

This study examined the relationship between accounting conservatism (AC) and financial performance for 231 manufacturing companies listed in Vietnam on the Hanoi Stock Exchange and Ho Chi Minh Stock Exchange stock exchanges between 2019 and 2022 using book value which includes ROA, ROE, and ROS. Accounting conservatism harms ROA, ROE, and ROS throughout six years from 2017 to 2022, according to a multivariable regression study using Ordinary Least Square (OLS), FEM, REM, and FGLS models on Stata. In addition, the COVID-19 pandemic has affected the global economy in general and manufacturing enterprises listed in Vietnam in particular, so the authors also analyze the influence of AC on financial performance in two periods, before and after COVID-19. The results obtained in the pre-COVID-19 period (from 2017 to 2019) are the same as those of the 6 years. However, from 2020 to 2022, AC has an adverse effect on ROA and ROE. Nonetheless, ROS is unaffected by AC. The article has given some discussion and recommendations to stakeholders including the government, auditors, and accountants at enterprises regarding the level of AC in enterprises to help users of financial information make the most optimal economic decisions.