Investigating the Effect of Correlation between Firm's Earnings and Announcement Timing on the Accruals

Usually investors in the real world evaluate the performance of companies using the correlation of company's earnings with each other and/or with industry averages. The aim of this study is to evaluate the effect of the correlation between firm's earnings and announcement timing on firms’ accruals in each industry. The study period was from 2008 to 2013 including 108 year-companies. The results showed a significant negative relationship between discretionary accruals and the relative performance of the companie's earnings. The results also showed that companies with high correlation between their earnings and industry earnings and relatively low performance, possess stronger relationship between discretionary accruals and the relative earnings performance. But the delay in the announcement of the company's earnings is not a factor in determining the possible adjusted discretionary accruals by managers.