K Maham; A-M Alimohammadi
Volume 9, Issue 34 , July 2012, , Pages 129-149
Abstract
This study investigates whether dividend paying status is associated with the Quality of earnings. Four measures are defined as proxies for earnings Quality; discretionary accruals, standard deviation and absolute magnitude of the accruals errors, and value relevance.To test the hypotheses, 450 year ...
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This study investigates whether dividend paying status is associated with the Quality of earnings. Four measures are defined as proxies for earnings Quality; discretionary accruals, standard deviation and absolute magnitude of the accruals errors, and value relevance.To test the hypotheses, 450 year firms were selected from companies listed in Tehran Securities Exchange (TSE) during 2005 to 2011. We used a multiple linear regression model. Findings show that firms with dividend paying have (1) lower absolute values of discretionary accruals; (2) lower absolute magnitude of the errors associated with the mapping of accruals into cash flows; and (3) more value relevant earnings. But results is not significant for standard deviation of the accruals errors. Larger dividends strengthen the positive association between dividend paying status and earnings quality.
