Effect of Conservative Reporting on Investors' Opinion Divergence at the Time of Earnings Announcement

Subject Areas : Financial Accounting

Dariush  Mokhtari Kajori ¹ (Islamic Azad University, Arak branch)
Reza  Jamkarani ² (Department of Accounting, Islamic Azad University, Qom Branch, Qom)

Received: 2018-03-13 Accepted : 2018-06-20 Published : 2018-06-01

Keywords: Earnings announcement, Conservative reporting, Investors' opinion,

Abstract :

This research aims to investigate the effect of conservative reporting on the investors' opinion divergence at the time of earnings announcement in a 5 year period during 2012-2016; the required data have been collected from Tehran Securities and Stock Exchange Organization and the population is consisted of 585 corporates-years which have been selected by the systematic removal sampling. To investigate the research hypotheses, linear regression and correlation were used and to analyze data and test the hypotheses, Eviews software has been utilized. In conclusion, it can be pointed out that the conservative measures are negatively related to the proxies of investors' opinion divergence at the time of earnings announcement and the relationship is stronger when the corporate reports bad news; also, conservation information content is stronger when the market is shocked by an announcement.Key words: Investors' opinion divergence at the time of earnings announcement, conservative reporting, bad news

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