Earning persistence in Tehran Stock Exchange Listed Companies with Underscoring on Accrual Reliability

Subject Areas : Futurology

Z.  Pourzamani ¹ (مسئول مکاتبات)
A.  Jahanshad ² (ندارد)
M.  kashani ³ (ندارد)

Received: 2011-09-08 Accepted : 2012-01-22 Published : 2012-04-20

Keywords: accruals, Reliability, earning persistence,

Abstract :

In this paper, relationship between earning persistence and accrual Reliability is studied. Atfirst a comprehensive balance sheet categorization of accruals is presented and then eachcategory according to the reliability of the underlying accruals is classified.The statistical population of this paper includes all the accepted companies in Tehran stockexchange and statistical sample contains 70 companies that have been chosen by stratifiedrandom sampling among statistical population, a period from 2002-2008. This paper includes 4hypotheses. To examine the hypothesis, panel analysis has been used. The results indicate thatless reliable categories of accruals lead to lower earning persistence and those investors do notfully anticipate the lower earning persistence, leading to significant security mispricing.