The Role of Environmental Uncertainty, Financial Constraints and Accounting Conservatism in Limiting the Performance Outcomes Due to Manager Overconfidence Mohsen Rashidi Baqhi Assistant Prof., Department of Accounting, Faculty of Economics and Administrative Sciences, University of Lorestan, Lorestan, Iran. E-mail: m.rashidi.acc@gmail.com Abstract Objective: The excessive self-esteem of managers leads to postponing bad news due to weaknesses in performance, and conservatism can be a factor in modifying it. In this paper, the purpose is to examine the role of accounting conservatism in limiting the functional outcomes results from overconfidence managers. Methods: The data of the companies listed in the Tehran Stock Exchange for the period of 2005 to 2017 has been extracted and the combined data regression model has been used to test the research hypotheses. Results: The results of the first hypothesis of the research, based on the significant and interactive effect of conservatism and overconfidence on company's performance, are approved. Also, the second hypothesis of the research indicates that environmental uncertainty has a significant effect on the overall interaction of overconfidence managers and accounting conservatism on future performance. Finally, the results indicate that financing constraints have a significant effect on the overall interaction of overconfidence managers and accounting conservatism on future performance. Conclusion: The results of the research indicate that business units with over-confident managers and conservative practices in accounting have a favorable future performance. Conservatism controls the managerial behaviors and it leads to improved performance, and the presence of funding constraints and environmental uncertainty due to fluctuation in the results lead to a reduction in management's optimism. Keywords: Manager over-confidence, Conservatism in accounting, Future performance. Citation: Rashidi Baqhi, M. (2018). The Role of Environmental Uncertainty, Financial Constraints and Accounting Conservatism in Limiting the Performance Outcomes Due to Manager Overconfidence. Journal of Accounting and Auditing Review, 25(3), 347-366. (in Persian) ------------------------------------------------------------ Journal of Accounting and Auditing Review, 2018, Vol. 25, No.3, pp. 347-366 DOI: 10.22059/acctgrev.2018.260311.1007919 Received: January 07, 2018; Accepted: June 30, 2018 © Faculty of Management, University of Tehran