Type of Earnings Management in Iranian Companies Listed in Tehran Stock Exchange (TSE)

Document Type : Research Paper

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Abstract

This study investigates whether earnings management motivated by opportunistic behavior or efficient contracting, for this purpose we examine a relationship between discretionary accruals and future profitability. Based on the explanatory power (adjusted R2), one of models exist in literature is selected to decompose total accruals into discretionary and non-discretionary-accrual components. We measure future profitability by use of each of three variables include one-year-ahead cash flows from operation, non-discretionary net income and change in earnings. Using multiple regressions, we find evidence that the type of earnings management selected by TSE listed firms tends toward efficient earnings management.

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References

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History

  • Receive Date: 12 June 2012
  • Accept Date: 12 June 2012

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