The Relationship between Real Earnings Management Activities and Future Performance of the Listed Companies in Tehran Stock Exchange

Subject Areas : Management Accounting

علی سعیدی ¹ , نرگس حمیدیان ² , حامد ربیعی ³

1 - ندارد
2 - ندارد
3 - ندارد

Received: 2012-08-25 Accepted : 2012-12-21 Published : 2014-03-16

Keywords: Real Earnings Management, abnormal cash flows from opera, abnormal discretionary expendi, abnormal cost of production,

Abstract :

There is considerable research on accrual-based earnings management in accountingliterature but, real activities-based earnings management and its effects are lessinvestigated. The purpose of this research is to investigate the relation of real earningsmanagement activities and future performance of listed companies in Tehran StockExchange.This research utilizes panel data method and a sample of 123 firms during the period2000-2010. Following Cohen & Zarowin (2010), we use the abnormal cash flows fromoperations, abnormal cost of production and abnormal discretionary expenditures asproxies of real earnings management activities. The future cash flows from operationsand future earnings from operations are considered as proxies of future performance.The results indicate that there is a negative and significant relationship betweenabnormal cash flows from operations, abnormal cost of production, and abnormaldiscretionary expenditures as the proxies of real earnings management and futureperformance

References:

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