Paper Information

Journal:   JOURNAL OF EMPIRICAL RESEARCH IN ACCOUNTING   Spring 2019 , Volume 8 , Number 3 (31) #r00444; Page(s) 23 To 45.

Iran's Recession and Firms' Earnings Quality

Author(s):  FADAEE MAHDI*, DASTGIR MOHSEN, Sarlak Chiva Ali
* Payam Noor, Isfahan, Iran
The reported earnings quality is particularly important for investors. Investors are willing to estimate their investments' future benefits in order to find their future cash interests and stock value. Generally, a recession may be defined as an interruption in normal operation of financial markets. This research investigates the effects of recession in Iran on the earnings quality of firms listed in Tehran Stock Exchange. If the firm's financial information is related to the recession period, two valued variables of unemployment and economic growth are used and the impact of these variables on earnings quality is measured. In order to measure earnings quality, this study uses the absolute amount of arbitrary accruals. The sample consists of 162 firms listed in Tehran Stock Exchange during the period from 2006 to 2015. To test the hypothesis, multivariate regression analysis method and panel data model are used. Results show that recession makes a drop in earnings quality of firms listed in Tehran Stock Exchange.
Keyword(s): Fraud,Adjusted-M-score-Beneish,Financial statements,Financial ratios
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