Empirical Studies in Financial Accounting

Abstract Because of the importance and position of earnings in financial reporting information, this study is an attempt to present a model for ranking earnings quality drawing an expert's view. The present study aims to provide a model for earnings quality in Iran. After reviewing the theoretical literature and sources of earnings quality, a conceptual model and research questionnaire were developed. Based on the conceptual model developed, three aspects of accounting, market and management were selected as dimensions of the model. Each of these dimensions is of the following measures (8 measures for accounting, 5 measures for market, and 3 measures for management). The research questionnaire was submitted to 21 experts in the field of accounting and financial management with sufficient experience and academic background in the field in question. Using the analytic hierarchy process (AHP) and the technique for order of preference by similarity to ideal solution (TOPSIS), the results were analyzed and the final model of the research was extracted. In this model, drawing on the scientific method for the analysis of the results, the weight of each dimension and measurement was determined. The results show that the accounting, market, and management dimensions have coefficients of 0/581, 0/295, and 0/124 respectively, affecting the earnings quality model. Also, the consistency ratio in the analytic hierarchy process for all dimensions is less than 10%, hence acceptable. Moreover, the results indicate that earnings in formativeness as a subset of market dimension is the most influential measure in the final model of earnings quality.

Abstract The main objective of this paper is to evaluate the effect of the corporate life cycle stages on the cost of equity of firms listed on the Tehran Stock Exchange. In this study we used Dickinson's Model (2011) to determine the corporate life cycle stages and Gordon Model to calculate cost of equity. In this study, we first took samples using the cash flow statement data (including cash flow from operating activities, cash flow from investing activities and cash flow from finance activities) and separated the firms in the growth stage, maturity stage and decline stage, then, using multivariate regression analysis and mean comparison tests, hypotheses were studied and tested. The results of 110 firms (990 company - year) from 2006 to 2014 shows that the firms, cost of equity in different stages of the life cycle (growth, maturity, decline) are significantly different. The results also show that in the decline stage the cost of equity is at the highest level and in the maturity stage it is at the lowest level.

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