Investigating on sticky Accruals Costs versus Costs paid in cash

Recent research of expense behavior showed that expenses increase more quickly with an increasing activity level than they decrease with a declining activity level. The term expense stickiness captures an asymmetric expense behavior. In this research, we test whether reported expenses and costs paid in cash may be used interchangeably for estimating cost stickiness. We further test whether a noteworthy reporting choice as depreciation influences the estimated level of stickiness. The main goal of this research is to compare sticky accruals costs, costs paid in cash and the effect of depreciation costs of emergence of costs stickiness phenomenon among firms accepted in Tehran Stock Exchange. For this purpose, two hypotheses were developed for this issue and data were analyzed for 91 members of Tehran stock exchange (selected by systematic elimination sampling method) for the period of 2004 to 2015. The regression model was tested and tested using conventional combination data. Results of this research indicated that accruals costs are significantly stickier than costs paid in cash. Moreover, operating costs after deducting depreciation are less sticky than operating costs before deducting depreciation.