Click for new scientific resources and news about Corona[COVID-19]

Paper Information

Journal:   THE IRANIAN ACCOUNTING AND AUDITING REVIEW   spring 2019 , Volume 26 , Number 1 #b00518; Page(s) 151 To 168.
 
Paper: 

The Relationship between Firm-Specific Discretionary Accruals and Stock Future Abnormal Returns

 
 
Author(s):  VADIEI MOHAMMAD HOSSEIN*, Saei Mohammad Hossein
 
* Department of Accounting, Faculty of Economic and Administrative Science, Ferdowsi University of Mashhad, Mashhad, Iran
 
Abstract: 
Objective: The purpose of this research is to investigate the relationship between Firm-Specific Discretionary Accruals and Stock Future Abnormal Returns on Tehran Stock Exchange. Methods: This study carries out according to the information available in listed Companies in the Tehran Stock Exchange (TSE), during 2011 to 2016, on a selected sample consisting of 190 companies. To test the research hypothesis, OLS regression has) been used. Results: The results show that there is a negative and significant relationship between Firm-Specific Discretionary Accruals and Stock Future Abnormal Returns. Conclusion: Investors should distinguish between the stability of profit components (cash and accrual) when valuing companies. The disregard of this difference has made investors optimistic about the future performance of companies when the Firm-Specific Discretionary Accruals is high, and pessimistic about the future of companies when Firm-Specific Discretionary Accruals is low. Therefore, if such unskilled investors were affected on stock price, we would expect high prices for companies with high Firm-Specific Discretionary Accruals and low prices for companies with low Firm-Specific Discretionary Accruals. In fact, companies are valued incorrectly and irrationally and since the stability of Firm-Specific Discretionary Accruals is low, in future periods, they will receive less than expected returns (negative abnormal returns) and companies with low Firm-Specific Discretionary Accruals will earn more than expected returns (positive abnormal returns).
 
Keyword(s): Firm-specific discretionary accruals,Industry-specific discretionary accruals,Earning management,Stock future abnormal returns
 
References: 
  • ندارد
 
  Persian Abstract Yearly Visit 68
 
Latest on Blog
Enter SID Blog