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Accounting Conservatism and Corporate Performance during the COVID-19 Pandemic

Author

Listed:
  • Benaziza Khadidja

    (University of 20 August 1955-Skikda, Algeria)

  • Kimouche Bilal

    (University of 20 August 1955-Skikda, Algeria)

Abstract

This paper examines the extent to which Algerian companies practised accounting conservatism during the COVID-19 pandemic and whether this practice impacted their performance. The study included 323 observations across 65 non-financial Algerian companies from 2018 to 2022. Accounting conservatism was measured by negative (non-operating) accounting accruals, and corporate performance was measured by the return on equity. The COVID-19 pandemic period was introduced as an interactive dummy variable. The results showed increased levels of accounting conservatism during the pandemic, which negatively affected corporate performance. Additionally, leverage had a negative impact on performance during the same period, while company size had a positive effect on financial performance. Therefore, the study recommends adopting flexible accounting policies that allow adaptation to economic changes without significant impacts on performance.

Suggested Citation

  • Benaziza Khadidja & Kimouche Bilal, 2025. "Accounting Conservatism and Corporate Performance during the COVID-19 Pandemic," Studia Universitatis Babeș-Bolyai Oeconomica, Sciendo, vol. 70(2), pages 65-78.
    • Handle: RePEc:vrs:subboe:v:70:y:2025:i:2:p:65-78:n:1004
    DOI: 10.2478/subboec-2025-0010
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    References listed on IDEAS

    as
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    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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