فصلنامه پژوهش های تجربی حسابداری
سال چهارم شماره 4 (پیاپی 16، تابستان 1394)

In two recent decades, researches focus has been turned from the relation between earnings and returns or stock price behavior towards earning quality, financial reporting quality and their effects on capital market. Besides, information asymmetry and its consequences are among the most vital issues to be dealt with in all the capital markets including Iranian Capital Market. Therefore, this paper, relying on the theoretical principles, attempts to examine the relation between earnings quality and information asymmetry in the firms listed in Tehran Stock Exchange as between 2004-2008.To examine the research hypotheses, different testing methods (Mann-Whitney Test, Sign Test, and Wilkakson test) have been applied. The findings of the study show that the difference between the information asymmetry of the companies with low earnings quality, on the one side, and the companies with high earnings quality, on the other side, is not significant. Also the levels of information asymmetry have increased in the period after the earnings announcement, as compared to the period before it. To examine the research hypotheses, different testing methods (Mann-Whitney Test, Sign Test, and Wilkakson test) have been applied. The findings of the study, finally, revealedthat the difference between the information asymmetry of the companies with low earnings quality, on the one side, and the companies with high earnings quality, on the other side, is not significant. The findings also showed that the levels of information asymmetry have ascended in the period after the earnings announcement, as compared to the period before it.

This paper examines factors effective on investor's behavior and valuation in IPOs. One of the factors is discretionary accruals. To test the effects of "earning management before IPO" and "ownership structure" after IPO, some variables such as accruals quality, total assets, sale growth and financial leverage have been used. The sample consists of 101 firms with IPO during the years 2000 to 2010. Results indicate that discretionary accruals before IPO has the explanatory power of ownership structure after IPO, but the reverse is not so. In other words, there is no evidence to reject the direct rejection between discretionary accruals before IPO and ownership structure after it. Thus, it can be concluded that since increase of earning management before IPO leads to increase of institutional ownership, some important factors other than discretionary accruals are effective on decision making of institutional investors.

This paper examines the functional fixation hypothesis from the viewpoint of separation of cash flows and accrual components of earnings by investors. The functional fixation hypothesis states that investors interpret earnings regardless of related accounting method. The accrual reversal phenomenon argues that accrual component has less persistence than cash component and accrual growth in current period leads to low returns in future. To test the hypothesis, data from 153 firms listed in TSE from 2003 to 2010 have been collected. The results reject the hypothesis, however, examination of the relation of unexpected changes in accruals and cash flows with current return shows that the rejection is due to different weight of news related to expected cash flows and market discount rate in accruals and cash flows.

Firms with growing trend of profitability in previous years could achieve suitable position in capital market and are very concerned about their reputation. Their concern is whether earnings forecast issuing can maintain reputation of the firms or damage it? Therefore, forecast earnings should be issued in such a way to maintain the growing trend of the previous earnings. The study is aimed to investigate the effects of sustainable pattern of growing earning on stock price response. The sample includes 104 firms listed in Tehran Stock Exchange during 2006 and 2011. Results indicate that reaction of stock price to bad news of earnings forecast in firms with sustained growing earnings is different from other firms. Meanwhile, reaction of capital market to good news and earnings per share forecast accuracy is not affected by sustained growth of earnings.

The data composed of firms & time in a certain period of time are called “panel data”. This paper investigates changes in earning quality of the firms listed in Tehran Stock Exchange. The sample includes 123 firms of various industries listed in Tehran Stock Exchange from 2001 to 2010. The paper examines the earning quality of the firms from the view points of “accrual quality” “earning persistency” “earning predictability” and “earning smoothness”. The results indicate any qualitative characteristic of earning, except earning smoothness variable has a significant relation with the dependent variable.

The existence of enough information on market and on time reflection of these information which affects securities prices, has very close relation with market efficiency. In such a market, distributed information affects securities prices and causes them to be more closes to their intrinsic value. This research, by choosing some events (such as General Assembly of shareholders, quarterly financial reports, predicting profit and announcing the real annual profit) and according to data obtained in 30 days around the event during the period between 2007 to 2011, investigates the reaction of stock market to events using paired T-Test and also compares it with efficient market model. Results show that stock market has a significant reaction to this information and also the market behavior toward these events is not efficient.

Accounting conservatism has been a challenging subject during the last century. Accounting researchers examined the advantages and disadvantages of this financial reporting characteristic. The advocates suggest that conservatism helps the owners to control the managers by mitigating their ability in opportunistic behaviors. On the other hand, the critics suggest that accounting conservatism reduce the firm's available financial resources by reducing net assets and earnings. This research examines the relation between conditional accounting conservatism and financial flexibility. Data are analyzed using multivariate linear regression; 2 proxies of conservatism, Basu (1997) and Ball and Shivakumar (2005); and 3 criteria of financial flexibility, cash balance, financial leverage and dividends. The sample consists of 80 firms listed in TSE. The results show no significant relation between conditional accounting and financial flexibility.

Quality of the economic transformation of savings into investment is determinant of economic growth and the more investors are informed, the higher quality investment they have. Improvements in quality and level of disclosure cause investors to be more informed of investee's specifications and power and thus promote investment quality and market efficiency. Disclosure quality affects the Stock Exchange efficiency and investment quality. In Iran, improvement of privatization has increased the importance of assignment efficiency and disclosure. This study is aimed to investigate the effect of voluntary disclosure on Assignment efficiency. The sample consists of 136 firms listed in TSE for the period from 2004 to 2010. Data is analyzed by stepwise regression and panel data model. The results show that the voluntary disclosure has a significant positive relation with assignment efficiency but control variables (size, profitability and growth) have a significant negative relation with assignment efficiency.

Earnings conservatism is defined as the extent to which firms expected losses are reflected more timely than expected gains of a firm. Balance sheet conservatism shows values which are recognized in the market but not in the books. This conservatism is measured using market-to-book value ratio. It is essential to investigate the relation between earnings conservatism and balance sheet conservatism when one uses the earnings- returns relation to investigate cross-sectional or time-series differences in earnings conservatism. The sample consists of 80 firms for the period of 2005-2011. The results show that earnings are not conservative in all periods and there is a negative relation of earnings conservatism and accrual conservatism with balance sheet conservatism.

The purpose of this study is to examine the relative predictive power of earnings, cash flows from operations and two traditional measures of cash flows (i.e. earnings plus depreciation and amortisation expense, and working capital from operations) in forecasting future cash flows. Further, an investigation of the extent to which firm size influences the predictability of earnings and cash flows from operations is presented. Our sample includes 94 firms listed in Tehran Stock Exchange (TSE) for the period of 2005-2009. The results show that in small firms, earnings has more predictive power to anticipate future cash flows, as compared to cash flows from operations and traditional cash flow measures; however in large firms, cash flows from operations seems better predictor than other measures. Further, according to the findings, the predictability of all models significantly increases with the firm size.