The Effect Of Conditional And Unconditional Accounting Conservatism On Investment Efficiency And Debt Financing In Companies Listed On The Iraqi Stock Exchange

Abstract

This paper aims to examine the impact of both conditional and unconditional accounting conservatism on investment efficiency and financing behavior among firms listed on the Iraqi Stock Exchange over the period 2015–2021. A total of 203 firm-year observations from 29 companies were analyzed to test four research hypotheses. The empirical results show that conditional accounting conservatism does not have a statistically significant effect on investment efficiency or financing decisions. In contrast, unconditional accounting conservatism is found to significantly improve investment efficiency, suggesting that higher levels of conservative reporting practices can lead to more efficient capital allocation.