This paper examines the effect of accounting conservatism on investment efficiency by examining whether conservatism reduces overinvestment and underinvestment problems. Additionally, examining whether conservatism mitigates underinvestment problem by raising debt financing. The paper sample covers a period of five years from 2012 to 2016, including 57 Egyptian firms. The results show a negative relationship between conservatism and over (under)investment, implying that there is a positive association between conservatism and investment efficiency. Furthermore, there is a positive relationship between conservatism and debt financing in firms suffering from underinvestment problems. Hence, accounting conservatism is crucial for improving the quality of financial information.