Mohhammad Reza Nikbakht; Mehdi Moradi
Volume 3, Issue 9 , April 2005, Pages 1-26
Abstract
One of the assumptions of efficient market is that investors react to new information. The evidence show that investors overreact to new information. They tend to be either over-optimistic or over-pessimistic. Therefore equity prices are not equitably determined by the "true" forces of market supply/demand ...
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One of the assumptions of efficient market is that investors react to new information. The evidence show that investors overreact to new information. They tend to be either over-optimistic or over-pessimistic. Therefore equity prices are not equitably determined by the "true" forces of market supply/demand and are not in equilibrium most of the time. Although stock prices would go abnormally high (low) due to investors' Overreaction in the initial period, they have a tendency to adjust themselves back to the equilibrium level in the subsequent period.
This research investigates the Investors' overreaction in the Tehran Stock Exchange. The results indicate that stocks in the best (worst) performing experience, a reversal of fortune in the following years.
Omid Poorheidari; Mahmood Kohansal
Volume 3, Issue 9 , April 2005, Pages 27-41
Abstract
The role of accounting information in setting security prices is one of the most fundamental issues in accounting. The purpose of this study is to extend the research on the value relevance of accounting numbers in two important directions. Firstly, we consider the Iran context and analyze if earnings ...
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The role of accounting information in setting security prices is one of the most fundamental issues in accounting. The purpose of this study is to extend the research on the value relevance of accounting numbers in two important directions. Firstly, we consider the Iran context and analyze if earnings and/or cash flows are relevant to explain stock returns. Secondly, we investigate how firm-specific attributes such as size, leverage and firm life-cycle influence the relative relevance of accounting measures (earnings and cash. flows). Our results support a linear relationship between stock returns and accounting variables. They indicate also that the relevance of earnings is conditional on size, debt level and life cycle of the firm. In contrast, the earning change reveals more information when the firms are small, mature and leverage firms. With regards to cash flows, we find that they do not reveal additional information beyond that contained in earnings.
Mohsen Khoshtinat; Mohammad Taghi Ghesvari
Volume 3, Issue 9 , April 2005, Pages 43-61
Abstract
In the present article, the power of financial ratios based on cash flow statement will be investigated, to foresee the companies' bankruptcies. To accomplish this, two metric models of Multiple Auditing Analysis and Logistic Regression are used, and their predictive power for bankruptcy of present companies ...
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In the present article, the power of financial ratios based on cash flow statement will be investigated, to foresee the companies' bankruptcies. To accomplish this, two metric models of Multiple Auditing Analysis and Logistic Regression are used, and their predictive power for bankruptcy of present companies of Tehran Stock Exchange is evaluated. Both models were using statistics of two groups of Tehran Stock Exchange companies. Both groups are composed of 32 companies who are the subject of the Article 141 of Commerce Act. The model of this analysis is KC and Bartzak (1985), which includes 9 financial ratios of accrual ratios of cash to total assets, current assets to total assets, quick ratio, sales to current assets, net income to total assets, and total liabilities to equity. It also includes cash flow statement rations, consisting of operational cash flow, operational cash flow to current liabilities, and operational cash flow to total liabilities.
The statistical result of analysis is the indication of validity of both models and selected financial ratios. The two models can well predict the financial crisis of the companies one year before occurring.
Saber Sheri; Farshad Sabzalipor
Volume 3, Issue 9 , April 2005, Pages 65-96
Abstract
The objective of financial accounting standard No.18 (Act-8) of Iran is to prescribe principles and procedures for preparation and presentation of consolidated financial statements. According to this standard, consolidated financial statements must be presented by the parent companies to provide information ...
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The objective of financial accounting standard No.18 (Act-8) of Iran is to prescribe principles and procedures for preparation and presentation of consolidated financial statements. According to this standard, consolidated financial statements must be presented by the parent companies to provide information about the economic activities of its groups. The main objective of this research is to examine empirically the value relevance of consolidated financial statements versus parent company's financial statements, using regression models based on valuation and information content approaches.
The findings of this study identify that consolidated financial statements information are not more value relevant than the information found in the parent company financial statements.
M. A. EKBATANI; M. A. SANGELADJI
Volume 3, Issue 9 , April 2005, Pages 1-27
Abstract
In this empirical study attempts were made to determine whether or not there was a significant difference between the opinions of academics and practitioners regarding the usefulness of traditional vs. contemporary managerial/cost accounting ...
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In this empirical study attempts were made to determine whether or not there was a significant difference between the opinions of academics and practitioners regarding the usefulness of traditional vs. contemporary managerial/cost accounting techniques. It was also tried to determine the degree of influences of various factors such as age, education, position, size of company, number of products, type of industry and several others on the opinion of 63 participants, 34 academics and 29 practitioners, regarding the above issue. Another attempt that was made in this study was to acquire some information about the opinion of academics and practitioners regarding the degree of importance of eleven skills and ten characteristics for managerial accounting graduates.
The outcomes of this study revealed that out of 38 managerial/cost accounting techniques presented in this research, 16 were rated high by all participants. This ranking was based on the statistical Means calculated for the total of 63 participants in this study. Out of these 16 techniques, 12 were selected by both groups of academics and practitioners. There were, however, seven techniques that ranked very low and viewed the least important by both participants. The outcomes of the research, however, indicated that a few demographic factors had some influence on the decisions and rating of the participants.
The outcomes of this study also revealed that from the 11 preferred skills for managerial/cost accounting graduates, the "thinking skill" was rated top by both the academics and practitioners. It was, then, followed by "listing", "quantitative", "problem solving" and "writing" skills. The three skills that were ranked as less important by both groups were, "reading", "speaking" and "microcomputer" skills. The least important skills by both groups were "management", “social” and "marketing" skills.
In regard to the important characteristics for accounting graduates, the outcomes of this study indicated that both practitioners and academics selected "common sense", "motivation", "ethical awareness", and "intellectual capacity" as the top four important characteristics. In contrast, "professional appearance", "assertiveness", and "pleasant personality" were the three characteristics selected by both groups as less important. Based on the above observations, the main conclusion reached by this research was that no significant differences existed between the opinions of practitioners and academics regarding the list of the most important managerial/cost accounting techniques in this study.
