Environmental sustainability disclosure and accounting conservatism

In this article, we analyzed whether the level of accounting conservatism a firm is affected by its environmental sustainability information disclosure. For that purpose, developed two Environmental Disclosure Indices (EDI), one obtained from mandatory reporting (annual report) and other voluntary (sustainability report), compared effects on conditional conservatism. Content analysis was used to develop indices evaluate disclosures. Moreover, technique multiple linear regression, using panel data, applied provide original empirical evidence for Portuguese companies listed stock exchange. We found higher disclosure enhances conservative practice, which consistent with argument Corporate Social Responsibility tends increase financial statements transparency. addition, disclosed in specific has superior impact These results showed managers tend engage earnings management activities being more order meet shareholders' expectations disclose levels information. Therefore, article brings some insights debate about usefulness contribution goals monitor guide managers’ activities.