Paper Information

Journal:   JOURNAL OF EMPIRICAL RESEARCH IN ACCOUNTING   WINTER 2019 , Volume 8 , Number 2 (30) #r00443; Page(s) 1 To 20.
 
Paper: 

Persistence of Accrual Components and Future Stock Returns

 
 
Author(s):  Assadi Gholamhossein, ZANDIYEH MOSTAFA, Gholami hassankiadeh Farid*
 
* Faculty of Accounting and Management, Shahid Beheshti University
 
Abstract: 
This research is aimed to identify factors misleading investors in determining future profitability, focusing on good accruals and accruals estimation error. This study is an applied and quantitative research. Also, because of using past information, it is considered asex-post facto research. The sample consists of 78 firms listed in Tehran Stock Exchange during the years 2004 to 2013 and the hypotheses is tested using regression coefficient analysis. Findings show that the cash component of profit is more persistent than all accrual components and also accruals related to growth is the most persistent component of accruals. In addition, the findings show that cash flow and accruals related to growth have a positive relationship with future returns, and accruals related to temporary fluctuations and accruals estimation errors have a negative relationship with the mentioned variable. According to the results, accruals related to temporary fluctuations and accruals estimation errors lead to investors misleading, due to their lower persistency.
 
Keyword(s): earnings persistence,accruals related to growth,accruals related to temporary fluctuations in working capital,accruals estimation errors,future stock return
 
References: 
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