B Mashayekhi; A. H. Hosseinpour
Abstract
AbstractMost of earnings management researches in Iran focus on abnormal accruals. Whereas accruals and real activities result in earnings management, which are complementary (Sanjaya and Saragih, 2012). According to various studies, accruals eventually lead to fraud (Jones et al, 2008). So far no research ...
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AbstractMost of earnings management researches in Iran focus on abnormal accruals. Whereas accruals and real activities result in earnings management, which are complementary (Sanjaya and Saragih, 2012). According to various studies, accruals eventually lead to fraud (Jones et al, 2008). So far no research studied the relationship between accrual earnings management and real earnings management in companies suspected to fraud. So, in this study, the relationship between accrual earnings management and real Earnings management in companies suspected to fraud are discussed. In this analysis, panel data is used. For hypothesis testing, the data of 107 listed companies on Tehran Stock Exchange, which are suspected to fraud, for the period of 1392- 1387 (Solar Calendar), has been used. Results of the analysis indicate that real earnings management on accrual earnings management in companies suspected to fraud, at 95 percent confidence level, have negative and significant correlation. As a result, researchers, standard settings and auditors should pay attention to both real earnings management and accrual earnings management in fraud suspected companies. Audit quality should also be strengthened in the Iranian suspected of fraud listed companies
Bita Mashayekhi; Vahid Mennati
Volume 10, Issue 40 , January 2014, , Pages 101-124
Abstract
In this study we investigate the relationship between earnings volatility and earnings predictability (short and long-term), in addition we investigate information content of earnings volatility. Our framework is based on Dichev and Tang (2009). There is a belief that higher earnings volatility indicates ...
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In this study we investigate the relationship between earnings volatility and earnings predictability (short and long-term), in addition we investigate information content of earnings volatility. Our framework is based on Dichev and Tang (2009). There is a belief that higher earnings volatility indicates lower earnings predictability. So according to their framework, financial information of the 400 companies listed in the Tehran Stock Exchange (TSE) from 2002 to 2012 were investigated. Although the predictability trend is not to be strict lower, But the results of this section suggest that earning volatility reduces the predictability of earnings. Moreover, the strength of long-term predictability is reduced. Additionally the loss company (Based on the theoretical framework that losses causes earnings volatility.) excluded and the tests were repeated but similar results were obtained. In the second section of the paper the relationship between the market reaction and earnings volatility was examined. Evidence suggests that the market will demand a higher return for companies with high volatility (higher risk).
