Earnings Management in Tehran Stock Exchange (TSE)

Authors

1 Assistant Professors of Accounting, Tehran University, Tehran, Iran.

2 M.A. of Accounting, Shahid Bahonar University of Kerman, Kerman, Iran.

Abstract

In this paper, by using of discretionary accruals and working capital discretionary accruals, the incentives of earnings management are reviewed in Tehran Stock Exchange during the period of 1379-1384. The investigated incentives are firm size, debt ratio, profit ratio (ROI), deviation in operating activities, and earnings variability. To investigating the relationship between earnings management and each of incentives, multiple variable regression analysis with accumulated (pooled) data is used. Discretionary accruals model, introduce the profit ratio as the only incentive to earnings management but, working capital discretionary accruals model, introduce the profit ratio, firm size and earnings variability as the incentives to earnings management in Iran. Comparison the results of two models, proved that, the working capital discretionary accruals model is efficient than discretionary accruals model.

Keywords

References

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Journal of Development and Capital
Volume 2, Issue 2 - Serial Number 4
January 2010
Pages 51-72

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History

  • Receive Date: 20 April 2008
  • Revise Date: 01 February 2009
  • Accept Date: 03 September 2009

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