The difference in the persistent of the industry’s earnings and firm-specific earnings

Document Type : Research Paper

Authors

1 Associate Professor of Accounting, Imam Khomeini International University, Qazvin, Iran.

2 Instructor, Department of Accounting, Payame Noor University, Tehran, Iran.

3 Ph.D. student of Accounting, Imam Khomeini International University, Qazvin, Iran.

Abstract

Management in line with achieving persistent earnings tries to remove periodical fluctuations of earnings and attempts to present an appropriate picture of the performance of the firm. While according to the economic theories, the effective factor in assessing the performance of the firms are major and rather persistence factors in industry.
The present study investigates the difference in the persistency of earnings in industry, firms and their elements. The data under investigation include 238 firms between 1387 and 1394. The results indicate more persistent earnings in industry and its elements than the earnings in the firm. Also business shocks are effective factors in reducing the persistence of earnings and accruals industry is more stable than company-specific accruals. However, bad news cannot significantly affect the persistence of earnings.

Keywords

References

Aflatoni, A., Nikbakht, L. (2010). Application of Econometrics in Accounting Research. Financial Management and Economic Sciences, Tehran, Terme Publication [In Persian].
Bozorgasl, M., Salehzade, B. (2015). Relationship management ability, and the persistence of earnings and cash flows with an emphasis on accrual components companies listed on Tehran Stock Exchange. Audit Knowledge, 14(58), 153-170 [In Persian].
Pourzamani, Z., Jahanshad, A., Kashani, M. (2012). The persistence of earnings components companies listed on Tehran Stock Exchange with an emphasis on accrual components. Future Studies of Management, 23(2), 57-66 [In Persian].
Brown, P., Ball, R. (1967). Some preliminary findings on the association between the
Journal of Accounting Knowledge
Volume 8, Issue 3 - Serial Number 30
November 2017
Pages 35-51

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History

  • Receive Date: 29 October 2016
  • Revise Date: 02 June 2017
  • Accept Date: 19 August 2017

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