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:: Volume 5, Issue 20 (quarterly journal of Fiscal and Economic Policies 2018) ::
3 2018, 5(20): 149-172 Back to browse issues page
Response of Stock Returns to Earnings Management in the Listed Companies in Tehran Stock Exchange
Nosratollah Abbaszadeh Dr
Abstract:   (1214 Views)
Company's managers tend to manipulate their earnings statistics or manage earnings to avoid reporting the realized losses or to gain their investors’ trust. There are three managing options to achieve the expected level of profits: the real benefit management (RM) false accounting, and accrual-based earnings management (AM).The purpose of this study is to investigate the relationship between real earnings management and future stock returns in 100 listed companies in Tehran Stock Exchange for the period of 2003-2015. In this study, we consider the effects of operating cash flow, production costs and discretionary spending in this relationship. The results of this study indicate that the manipulation of real activities via abnormal operating cash flow and abnormal discretionary costs increases the stock returns in the current year, and have a significant relationship with the stock returns in the next year. Abnormal production cost in the current period which is resulting from an increase in production is not related to stock returns in the next year. It means that the price of the share can reflect the full impact of excess production on the future operational performance of the company.
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Keywords: real activities manipulation, accrual-based earnings management, future stock return
Full-Text [PDF 872 kb]   (394 Downloads)    
Type of Study: Research | Subject: Special
Received: 2017/07/1 | Accepted: 2018/03/7 | Published: 2018/03/7
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Abbaszadeh N. Response of Stock Returns to Earnings Management in the Listed Companies in Tehran Stock Exchange. 3. 2018; 5 (20) :149-172
URL: http://qjfep.ir/article-1-667-en.html


Volume 5, Issue 20 (quarterly journal of Fiscal and Economic Policies 2018) Back to browse issues page
فصلنامه سیاستهای مالی و اقتصادی Quarterly Journal of Fiscal and Economic Policies
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