Abstract
Conservatism is an action that is used in conditions of uncertainty and limiting management’s optimistic behaviors to increase the reliability of financial statements. Financial distress and growth opportunities are among the factors that can improve the level of accounting conservatism. Meanwhile, managers' behavioral characteristics are expected to influence the relationship between financial distress and growth opportunities with accounting conservatism. Therefore, this study aims to investigate the effect of management uncertainty on the relationship between financial distress growth opportunities, and accounting conservatism. The results of this study show that the variables of financial distress and growth opportunities have a positive and significant effect on accounting conservatism. Management overconfidence has no significant effect on the relationship between financial distress and accounting conservatism but it moderates the relationship between growth opportunities and accounting conservatism and has a negative and significant effect on the relationship between them. In other words, those managers with unfavorable financial situations do not have a positive outlook on the future of the company and increase the level of accounting conservatism. Managers of large and growing companies also tend to opt for more conservative accounting practices to minimize their political and social costs. However, overconfident managers are optimistic about the future of the company and reduce the level of accounting conservatism.
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