Impact of accounting conservatism on social and economic development with moderation of investment efficiency

Pengzhao Yue

International Journal of Applied Systemic Studies, 2025, vol. 12, issue 3, 258-271

Abstract: Accounting conservatism ensures financial statements that reflect a cautious approach, understating assets, and income rather than overstating them. It encourages responsible resource allocation, enhances investor confidence, and supports long-term viability which is crucial for bringing sustainable success in dynamic business environments. This study explores the connections between accounting conservatism (AC) and firm sustainable performance (FSP) with moderation of investment efficiency (IE). Second, the study conducts are comprehensive analysis of AC toward two major streams of FSP such as economic performance (ECP) and social performance (SP). This study revealed a positive correlation between AC and sustainable performance along with a positive nexus among AC, ECP, and SP respectively. Finally, the study observed a moderation of IE from the connection of AC and sustainable performance. Nonetheless, this study bears various limitations, which should be considered by future research to validate the current findings toward other regions, worldwide.

Keywords: accounting conservatism; sustainable development; social development; economic development; structure equation modelling; resource-based view; RBV. (search for similar items in EconPapers)
Date: 2025
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