Conservatism and corporate cash holdings: A risk prospective

The purpose of this study is to investigate the relationship between accounting conservatism and a firm's cash holdings. The authors also investigate whether the association is dependent on the firm being public or private. Using a unique data of GCC countries from 2003 to 2012, the authors find that there is a positive association between accounting conservatism and amount of cash holdings for GCC firms. Also, the researchers find that the association is higher for public firms as compared with private firms.