The impact of conservatism accounting on the relationship between hold cash and abnormal stock returns

This article examines the effect of accounting conservatism on the relationship between hold cash and abnormal stock returns in accepted companies of Tehran Stock Exchange during the period of 2007–2011. In this context the model of Givoly&Hayen(2000) has been applied to measure conservatism and the total ratio cashand investments on the Value Of Stock Market at the beginning of the year and to measure the hold cashassets and the difference between the actual rate of return and the expected rate of return on stake holders has been applied to evaluate the abnormal return. In this study, Multivariate regression model and Pearson correlation coefficient and Spearman were used in order to analysis the hypothesis. According to the research results, can be said conservatism has moderating effect on the relationship between hold cash assets and abnormal returns which means with increasing conservatism, levels of hold cash assets reduces and the subsequently the abnormal returns increases.