19c96fd51791d8d23b9-174e 20210729232855704 ijaas:ijaas ch.ta.yeh@gmail.com WEB-FORM International Journal of ADVANCED AND APPLIED SCIENCES Int. j. adv. appl. sci. 2313626X 23133724 9 2021 9 2021 8 9 Porto Accounting and Business School, Porto Polytechnic Institute, Porto, Portugal Pereira et al. In this article, we analyzed whether the level of accounting conservatism of a firm is affected by its environmental sustainability information disclosure. For that purpose, we developed two Environmental Disclosure Indices (EDI), one obtained from the mandatory reporting (annual report) and the other from the voluntary reporting (sustainability report), and compared the effects on conditional conservatism. Content analysis was used to develop two indices to evaluate the level of environmental disclosures. Moreover, the technique of multiple linear regression, using panel data, was applied to provide original empirical evidence for Portuguese companies listed on the stock exchange. We found evidence that higher environmental sustainability information disclosure enhances the conservative accounting practice, which is consistent with the argument that a higher level of Corporate Social Responsibility tends to increase financial statements transparency. In addition, we found that environmental information disclosed in specific and voluntary reporting has a superior impact on the level of conditional conservatism. These results showed that managers tend to engage in earnings management activities by being more accounting conservative in order to meet shareholders' expectations and disclose higher levels of environmental information. Therefore, this article brings some insights to the debate about the usefulness of accounting conservatism and the contribution of sustainability goals to monitor and guide managers’ activities. 9 2021 9 2021 63 74 10.21833/ijaas-crossmark www.science-gate.com false IASE www.science-gate.com 10.21833/ijaas.2021.09.009 http://www.science-gate.com/IJAAS/2021/V8I9/1021833ijaas202109009.html http://science-gate.com/IJAAS/Articles/2021/2021-8-9/1021833ijaas202109009.pdf