Accounting Conservatism and the Value of Cash Holdings (Case Study of Listed Companies in Tehran Stock Exchange)

The present study investigates the effect of conservatism on the value of cash holdings by the companies. Therefore, the sample consisting of 70 companies listed on the Stock Exchange during the years 2008 to 2012 were chosen and analyzed. First, by examining how changes in cash and stock returns, it was shown that the value of a Rial (currency of Iran) cash is nominally less than a nominal Rial. In the following, in order to achieve the main goal of the research, by entering the conservatism in research model, it was shown that conservatism can, by reducing the cost of agency, enhance the value of cash holdings of the company.