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The Effect of Conservatism, Slack, Managerial Ability, and Uncertainty on Company Financial Performance

Year: 2025

Type: article

Abstract: This study aims to investigate the role of debt financing in the relationship between conservatism, slack, managerial capability, uncertainty, and corporate financial performance. To evaluate this effect, an exploratory study has been used on 382 samples of all sectors, except finance, listed on the ASEAN 5 for 21 years. Panel data regression with a fixed effect method is used to test the company's financial performance. The study results indicate that conservatism and available slack positively affect a company's financial performance. Conversely, recoverable slack and macroeconomic uncertainty negatively affect a company's financial performance. This paper contributes to the literature by advancing knowledge about accounting conservatism, organization slack, and company financial performance relationships over time, which have been scarcely studied. JEL classification numbers: M410, G300, G100, Keywords: Accounting conservatism, Slack, Managerial ability, Uncertainty.

DOI: 10.47260/jafb/1513

Authors: Eduard Ary Binsar Naibaho, Farah Margaretha Leon, Bahtiar Usman

Institution: Universitas Trisakti

Language: English

Topic: Auditing, Earnings Management, Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: gold

OpenAlex ID: W4407607441

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