Studying the Effect of Corporate Social Responsibility on Accounting Conservatism Using Maximum Likelihood-Structural Methods

Document Type : Research Paper

Authors

1 PHd student

2 Associate Professor, Department of Accounting, Management and Accounting faculty, Islamic Azad University Tonekabon Branch, Islamic Azad university, Tonekabon, Iran

3 Assistant Professor, Department of Accounting, Management and Accounting faculty, Islamic Azad University challous Branch, Challous, Iran

Abstract

This research aims to explore how corporate social responsibility (CSR) affects different models of accounting conservatism. The study uses Maximum Likelihood-Structural (ML/SEM) and the GMM approaches for a period from 2012 to 2023, focusing on 93 companies listed on the Tehran Stock Exchange. To analyze this effect, the CSR is applied to four accounting conservatism models: Basu (1997), Ball et al. (2005), Givoly et al. (2000), and Beaver et al. (2000). The findings indicate that the ML/SEM method performs better than the generalized method of moments across all models. Moreover, the results show that, using the ML/SEM approach, the corporate social responsibility index has a significant negative effect in the Basu (1997) and Ball et al. (2005) models. Additionally, the index related to corporate social responsibility shows a significant positive effect in the Beaver et al. (2000) and Givoly et al. (2000) models. Among all the models, the Basu (1997) model shows the strongest link between corporate social responsibility performance and accounting conservatism.

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Journal of Accounting Advances
Volume 16, Issue 2
February 2024
Pages 183-219

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History

  • Receive Date: 07 May 2024
  • Revise Date: 01 February 2025
  • Accept Date: 05 February 2025

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