The Relation between Real Earnings Management and Abnormal Return in Companies Listed in TSE

The present study aimed to investigate the relationship between real earning management and stock abnormal returns of companies listed on Tehran Stock Exchange. For this purpose, real earning management using the methods of abnormal reduction in general, administrative and selling costs, abnormal increasing in non-operational profit from the sale of fixed assets and overproduction have been considered as independent variables and stock abnormal returns has been considered as dependent variable. Geographic scope of the study is the companies listed on Tehran Stock Exchange during the period of 2004 to 2014. Multiple regression method was used in the study to test the hypotheses. The results showed that there is a significant relationship between the real earning management using the abovementioned methods and stock abnormal returns.