The Impact of the Business Strategy on the Level of Accounting Conservatism and Reflection of it on the Company Performance: Empirical Research on a Sample of Iraqi Companies


  • Noor Ahmed Mahdi University of Samarra


Business Strategy, Accounting Conservatism, Financial Performance


The study aimed to measure the impact of the business strategy according to the classification of (Miles snow) and to choose the extent of the impact of that reservation and the extent of reflection of it in the company value in the Iraqi environment, and to achieve this goal, the study dealt with a quantitative method for the financial lists of a sample of companies listed in the Iraq Stock Exchange and the number (13) companies divided into different sectors (banks, industrial companies, agricultural companies, investment companies, insurance companies) for the period from 2017 to 2021, and a model (Bentley et al., 2013) was used to measure business strategy (excavating, advocating, analyzing) The intermediate variable was measured accounting conservatism by relying on the (Givoly & Hayn, 2000) model, while financial performance (the dependent variable) was measured based on the (Tobin Q) model. The study found that there are 7 companies that follow the strategy of the defender against 6 companies that follow the strategy of the prospector. It is also noted that the majority of the industrial sector follows the strategy of the defender, while the insurance companies follow the strategy of the prospector, while there is a disparity in companies in the banking and agricultural sectors. It also found that there is a positive relationship Among the variables of the study, the impact of business strategy on the financial performance of the company increases when mediating accounting conservatism.


Download data is not yet available.


Abdulwase, R., Ahmed, F., & Nasr, F., (2020), The role of business strategy to create a competitive advantage in the organization. Open Access J Sci, 4(4), 135-138.

Al-Hayali, O. O. M. & Al- Samadi, Z. M. A. (2021), The Impact of Business Strategies on Continuous Improvement: A Case Study of Al-Hikma Pharmaceutical Company in Iran, The Arab Journal of Management, Volume 41, Number 2, College of Economics and Administrative Sciences, Al al-Bayt University, The Hashemite Kingdom of Jordan.

Al-Nuaimi, A. T. & Al-Tamimi, A. F. (2008), Financial Analysis and Planning: Contemporary Trends. First edition, Dar Al-Yazuri for Publishing and Distribution.

Amash, M. B. (2021), The Relationship between Conservatism and Accounting Hedging in Light of Financial Crises: An Applied Study in a Sample of Iraqi Companies, Unpublished Master's Thesis, College of Administration and Economics, University of Tikrit.

Bouras, M. (2020), The Impact of Tax Planning on the Financial Performance of Economic Companies: An Econometric Study of a Sample of Companies Listed on the Stock Exchanges of Algeria, Morocco, and Tunisia for the period (2015-2018), Unpublished Master's Thesis, Faculty of Economic Sciences, Commercial Sciences, and Facilitation Sciences, Larbi Ben M'hidi University, Oum El Bouaghi, Algeria.

Cummins, J. David & Weiss, Mary A. & Zhang, Juan, (2019), Accounting Conservatism in the Property-Liability Insurance Industry, URL:

Farah, N., Farrukh, I. & Faizan N., (2016), Financial Performance of Firms: Evidence from Pakistan Cement Industry, Journal of Teaching and Education, Vol. 5, No. 1.

Fatihudin, D. (2018). How measuring financial performance. International Journal of Civil Engineering and Technology (IJCIET), 9(6), 553-557.‏

Givoly, D., & Hayn, C., (2000), The changing time-series properties of earnings, cash flows and accruals: Has financial reporting become more conservative?. Journal of accounting and economics, 29 (3), 287-320.

Habashy, E., & Mahdy, A. E. (2019). Patient-reported outcome measures (PROMs) in pelvic floor disorders. Current urology reports, 20, 1-6.

Hejranijamil, M., Hejranijamil, A., & Shekarkhah, J., (2020), Accounting conservatism and uncertainty in business environments; using financial data of listed companies in the Tehran stock exchange. Asian Journal of Accounting Research.

Houqe, M. N., Kerr, R., & Monem, R., (2013), Business strategy and earnings quality, Uyar, M., (2019), The management accounting and the business strategy development at SMEs. Problems and perspectives in management, 17 (1), 1-10.

Hussein, A. I., Mahmood, S. M., & Hussein, W. N. (2018). The relationship between the accounting conservatism and the financial performance efficiency of the banks according the data envelopment analysis: Evidence from Iraq. Opción, 34(85), 2661-2686.

Hussein, M. A., Shaaban, S. E. & Yassin, A. T. (2020), The impact of financial crises on levels of accounting conservatism, experimental evidence from Iraqi industrial companies, Tikrit Journal of Administrative and Economic Sciences, Volume 16, College of Administration and Economics, University of Tikrit.

Hussein, W. N. (2018), Impact of national culture on tax evasion through apply in accounting conservatism in Iraq, Doctoral dissertation, School of Management and Business Administration Sciences, Szent Istvan University, Godollo. Hungary.

Jasim, A. N., Hussein, A. I., & Hassoon, L. N. (2018). The impact of narrative disclosure on the Firm value: empirical evidence from the Iraqi banking sector. Opcion, 34(86), 2312-2325.

Li, H. (2020), Business Strategy, Accounting Conservatism and Performance, Accounting and Finance Research, DOI:

Magerakis, E., & Habib, A. (2021). Business strategy and environmental inefficiency. Journal of Cleaner Production, 302, 127014.

Mantak, S.O., Wali, A.I., & Sadq, Z.M. (2019). The Role of Training and Empowering Human Resources Strategies on Enhancing the Capabilities of Innovation Strategic, Koya University Journal of Humanities and Social Sciences, 2(1): 98-108, DOI:

Novatiani, R. A., Saudi, M. H. M., Kusumah, R. W. R., Fajar, A., & Yuniarti, R., (2018), The Influence of Business Strategy and Good Corporate Governance on Company’s Performance. International Journal of Engineering & Technology, 7(4.34), 284-286.

Omer, S. O., Sadq, Z. M., & Ahmed, S. A. (2017). The Role of Strategic Leadership Practices in Enhancing the Level of Organizational Performance. Zanco Journal of Humanity Sciences, 21(5): 220-238. DOI:

Saleh, R. W. (2022), The impact of business strategy on accounting conservatism and its reflection in the value of the company, an applied study on a sample of companies listed in the Iraq Stock Exchange, an unpublished master's thesis, College of Administration and Economics, Tikrit University, Iraq.

Suwarnoa, S., Mu’minatus, S., Aries, K. & Anita, H., (2020), Business Strategy, Accounting Conservatism and Company Innovation, Universities Muhammadiyah Gresik, Indonesia, vo1(13).




How to Cite

Noor Ahmed Mahdi. (2023). The Impact of the Business Strategy on the Level of Accounting Conservatism and Reflection of it on the Company Performance: Empirical Research on a Sample of Iraqi Companies. American Journal of Economics and Business Management, 6(8), 13–28. Retrieved from