Accounting Conservatism In Non-State Companies And Consolidated Financial Statements

Abstract Research background Accounting conservatism has been a significant area of research in the last few decades due to its effects on financial reporting quality. Nevertheless, it has been influenced by many factors that lead companies to be more or less conservative. Purpose This paper aims to contribute to this research stream by exploring the impact of state ownership and consolidation on accounting conservatism. The literature has not given much attention to state ownership and has never explored consolidation. Research methodology The study employed the data of 90 Algerian companies from 2016 to 2021 and employed Basu’s (1997) model to measure conservatism. The relationships between variables were estimated using linear regression. Results The results indicate that Algerian companies’ financial statements are generally conservative. However, accounting conservatism is more prevalent in state companies and separate financial statements. Novelty The study is the first in Algeria and is among the few studies that are interested in accounting consolidation as a determinant of conservatism.