<p>One of the tools and mechanisms of drafting accounting standards is conservatism. Conservatism has been proposed as a useful tool for the board of directors in order to fully implement key tasks such as determining strategies, comprehensive supervision of the company
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<p>One of the tools and mechanisms of drafting accounting standards is conservatism. Conservatism has been proposed as a useful tool for the board of directors in order to fully implement key tasks such as determining strategies, comprehensive supervision of the company's executive directors, and ensuring accountability to shareholders and stakeholders in recent years. Conservatism is placed as a criterion of pessimism in front of the manager's optimism to increase the quality of profit. Studies show that managers do not always behave in a completely rational way, and under the influence of characteristics such as optimism, overconfidence, etc., they may make irrational decisions that have an important impact on the company's financial and operational activities. On the other hand, one of the basic elements in making investment decisions is the cost of equity, which decreases the economic added value of companies. In order to maintain the value of the economic unit, the management should try to bring the expected return to at least the level of the cost of equity. In this, the key to success is reducing the cost of equity. Therefore, this research seeks to answer the question of whether the moral characteristics of managers have an effect on the non-linear relationship between accounting conservatism and the cost of equity? This research has been carried out in the framework of inductive-inductive arguments. In this research, library and field methods were used to collect information. The theoretical bases and researches carried out were used as a library basis. The statistical population of this research includes all the companies accepted in the Tehran Stock Exchange during the financial periods of 1392-1401. According to Cochran's formula, the number of samples used in this research has been obtained for an error of 0.085 (about 8.5%). According to the findings of the research, with the increase of managers' overconfidence, the relationship between managers' conservatism and the cost of equity will weaken, and there is an inverse relationship between the independent and dependent variables. Also, with the increase in managers' optimism, the relationship between the conservatism of managers and the cost of equity is strengthened, and there is a direct relationship between the independent and dependent variables. Also, with the increase of overconfidence, the cost of equity will decrease and there is an inverse relationship between the independent and dependent variables. Also, with the increase of the company size variable, the relationship between managers' conservatism and the cost of equity weakens, and there is an inverse relationship between the independent and dependent variable. This variable supports the linear relationship between managers' conservatism and the cost of equity.</p>
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