| Summary: | The study aimed to examine the relationship between accounting conservatism and investment efficiency
decision in light of difference managerial equity as the specified basis of the investment decisions
efficiency. The study model was designed based on the consideration that accounting conservatism
represents the independent variable, while the investment decisions efficiency represents the dependent
variable. The research measured the independent variable to sample study by using a scale of Rasu
(1997), While the research used the Biddle et. al., (2009) model to measure the dependent variable. To
achieve the objective of the study, we tested a hypothesis by using the designed model but with different
levels of its managerial ownership in a sample of 87 Jordanian tourism companies for the period 2013-
2017. The results of the study supported its hypothesis as it showed the existence of different relations
between accounting conservatism and investment efficiency decisions according to the difference in the
ratio of the managerial ownership. We have found that the majority of the Jordanian companies do not
follow conservative accounting policies, so the phenomenon of asymmetry of information and
inefficiency of investment decision prevails. We have also found that in conservative companies, the
efficiency of investment decisions depends on the level of marginal conservatism, which differs from one
level to another. The current study makes an essential contribution through empirically displaying that
managerial ownership has an impact on the relationship between accounting conservatism and
investment decisions efficiency, moreover, the result of the study refuted the view that the benefit of the
accounting conservative approach is absolute in improving the quality of financial reports and increases
the efficiency of investment decisions and also reduces the agency problems by revealing the existence
of what the researchers called the marginal level of benefit of a conservative approach. This is because
the conservatism was linked to a manager's motives.
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