Accounting Conservatism and Sustainability Reporting in Changing Times: Evidence from Turkish Banking Industry

Kaya İ. , Akbulut D. H.

17th International Conference on Accounting, Ankara, Turkey, 22 - 23 October 2020, pp.13-17

  • Publication Type: Conference Paper / Summary Text
  • City: Ankara
  • Country: Turkey
  • Page Numbers: pp.13-17


This paper examines whether accounting conservatism improves lending capacity of banks during the crisis periods. We measure accounting conservatism and its relation with the lending capacity and the sustainability reporting on Turkish deposit banks. We test our predictions empirically through an unbalanced panel data of 32 Turkish deposit banks in 1999-2019. We hypothesize that banks with higher conditional conservatism would use larger loan provisions and conditional accounting conservatism could reduce adverse effect of the financial crises on the lending capacity of the banks.  We also examine whether a bank’s engagement in sustainability performance and reporting reduces information asymmetry and leads to less demand for conservatism by outside stakeholders.  We test whether a bank conditional conservatism changes or not after starting to report sustainability information. Our results are different with prior researches and we find no evidence of the positive impact of conditionally conservative accounting policies on the supply of bank loans. When we test our second hypotheses there are no significant the relation between sustainability reporting and the level of conservatism.