Accounting conservatism and corporate social responsibility

We examine the association between accounting conservatism, expressed in form of asymmetric timeliness recognition economic gains and losses, corporate social responsibility (CSR). provide evidence that, under unfavorable macroeconomic conditions financial constraints, as well increased levels outside pressure from debtholders equity holders, catering for capital providers through conservative reporting becomes a managerial priority over engagement CSR. Our results overall indicate our whole sample period (starting early 2000s), higher conservatism are negatively associated with CSR orientation shown by firms; however, analysis also indicates significant reversing trend regarding effect on CSR, coinciding post-financial-crisis period. The findings robust to number specifications tests, including use an instrumental variable approach explicitly addressing endogeneity biases related reverse causality concerns. study suggests monitoring stakeholders, firms prioritize commitment needs non-financial stakeholders other interest groups.