The Effect of Economic cycle on Relationship between Accounting conservatism and Financial Constraints

All companies can not financing and have financial constraints to finance. Financial constraints have external factors due to macroeconomics as well as internal factors stemming from company management. A very important external factor is the financing of companies is the economic cycle, and it is obvious that when the country is in crisis and recession, financing is hard, of course, corporate financial constraints will increase. One of the factors that could be the company's financial constraints will affect is accounting conservatism Companies that are more cautious about their reports are definitely more reliable banks and capital providers. The purpose of this study was to investigate the effect of economic cycles on the relationship between accounting conservatism and financial constraints in companies listed in Tehran Stock Exchange. In this study, using systematic methods, a sample of 80 companies of the companies listed in Tehran Stock Exchange for the period 1387 to 1396 were selected. The variables and theoretical study proposed three hypothesis for research and econometric methods were used to test the hypothesis.The results of the hypothesis test showed that the economic cycle has a significant effect on the financial constraints, as well as the economic cycles has a significant effect on the relationship between accounting conservatism and financial constraints of the companies listed in the Tehran Stock Exchange.