Investigating the Relationship between Discretionary Accruals and Stock Return in Growth and Non-growth Companies in Tehran Securities Exchange

The role of discretionary accruals in stock valuation and investment contracts is crucial in accounting literature. Growing companies are increasing their income and earnings rapidly employing potential opportunities of investment and unique features of accruals. This study investigates the relationship between discretionary accruals and stock return in growth and non-growth companies Listed in Tehran Stock Exchange. Target sample consists of 197 listed companies in Tehran Stock Exchange during 2002-2-14. Collected data was analyzed using multivariable regression and Eviews software. The results show that compared to non-growth companies, discretionary accruals manipulation in growth companies affects stock return. Also, positive accruals in growth companies affect stock return more, i.e. manipulation of accruals with the purpose of increasing reported earnings in growth companies, compared to non-growth companies, is more significant.