The Impact of Accounting Conservatism on the Cost of Capital: A Case Study of Industrial Companies Listed on the Qatar Stock Exchange

Abstract

This study aims to investigate the impact of accounting conservatism on the cost of capital in industrial companies listed on the Qatar Stock Exchange. To achieve this objective, the researcher used a descriptive approach to analyze the published financial data of nine industrial companies listed on the Qatari stock market during the period from 2019 to 2023. The researcher also applied several statistical analysis methods, including multiple regression and panel data models.

The study’s results indicated that most companies follow clear accounting conservatism policies, with noticeable variation in the degree of conservatism across companies and periods. Furthermore, the results confirmed a statistically significant inverse relationship between accounting conservatism and the cost of capital, whereby conservatism reduces information risk and lowers financing costs through decreasing risk premiums and borrowing costs.