Empirical Studies in Financial Accounting

Abstract This study provides events about the impact of Earnings Management on the Value-Relevance of Earnings and Book Value with comparison of short­ term and long-term discretionary accruals. According to the result of this study, in Tehran Stock Exchange (TSE), Earnings management reduces the value-relevance of earnings and increases the value-relevance of book value and also the effect of long-term discretionary accruals on the value relevance of  earnings  and  book  value  is  greater  than  the  effect  of  short-term discretionary accruals on the value relevance of earnings and book value.

Abstract This paper aims to evaluate the earning forecasting model based on cost variability and cost stickiness   in comparison to other forecasting models. Cost stickiness means that the rate of decrease in costs while sale declines is less than the rate of increase in costs while sale grows. In other word, costs are sticky downward. The data used in this research was gathered from 85 companies accepted in Tehran stock market from 1994 to 2004. To analyze the data two regression techniques called simple and rolling methods and also confidence coefficient R2 and F test are used. The results indicate that the power of the earning forecasting model based on cost variability and cost stickiness is significantly more than the others'.

Abstract This study investigates the effects of working capital management on the profitability of the firms listed in Tehran Stock Exchange. Withthis regard, variables such as receivables collection period,  inventory conversion period, accounts  payable  payment  period,  and cash conversion cycle  are used for the measurement of  working capital management, and Return  on Assets  (ROA) is used for the measurement of  profitability of  the  firms. Moreover, Sales growth, Leverage, and Size are used as control variables. Using multiple regression and considering the results of  investigations of 224 firms  in the period from 1382 to 1386, we find that  there  is a negative significant correlation between receivables collection period, Inventory conversion period, and cash conversion cycle with  the  profitability of firms listed  in Tehran Stock Exchange. No evidence confirming significant correlation between accounts payable payment period and profitability is found. Considering this, the negative significant correlation between profitability and Cash conversion cycle measuring the joint effects of receivables collection period, Inventory conversion period and Accounts payable payment period indicates that firms can increase  their profitability and create value for  their  stockholders by appropriate management of working capital and decreasing Cash conversion cycle logically.

Abstract This study presents evidence on the validity of the dividend signaling hypothesis, by using a new testing approach. The main question in this paper is whether dividend is informative   about a firm’s future earnings.  We  examine this issue  by investigating   the association  between  current  year  stock  returns and  current  and  future  earning   for  firms  that  pay  dividends   in  the  current years  as compared   to firms  that  do not pay  dividends. The  analysis   of the data reveal  that relative  to non-dividend   paying  firms, dividend  paying  firms have  current  returns  that  are  more associated   with  future  earning . Overall, our results are consistent with dividends providing relevant   information about future earning to the market that this information affect stock price.

Abstract Globalization, through linking companies to international markets and increasing competitive space, has necessitated the restructuring of companies. Combination of companies, ownership and development of target markets are  among  the  efforts  made  by  companies  in  order  to  continue  their economic lives. These companies are also forced to utilize domestic and international capital markets to obtain their financial resources.  In this regard, corporate governance is a criterion which plays a fundamental part in decision making process of investors and leasers. In order to investigate the role of institutional stock holders and percentage of non-Executive managers as some criteria of corporate governance on firm value, the 4-year data of 97 firms were studied. The findings of this study show that there is a significant relationship among institutional stockholders and company value, as well as presence of non-Executive managers and company value. The findings of this study, in line with similar researches, support the view that presence of institutional stockholders in the board of directors of companies increases company value.

Abstract In this research the relation between ownership concentration and performance has been investigated   so based on research conditions, 58 listed companies in TSE were selected and their information for the period of 1380-1383 was used. The regression model used in this research pooled cross­ sectional and time series data. Panel data regression also is used to estimate related coefficient and models. Ownership concentration was determined by ownership percentage of institutional investors or block shareholders and performance was determined by stock return and earning per share. The results show that there is a significant relationship between ownership concentration and EPS, so it means that by increasing the percentage of ownership concentration, managements become more   than before under control and consequently it cause firms' performances to become improved. The relation between ownership concentration and return criterion has also been examined and show that it is based on the different kinds of ownerships and different factors that effects on returns.