Investors, creditors and financial analysts are interested in gaining more information about income smoothing in investee companies, especially if it would be effective on their deciding. The Finding of many researches shows that investors prefer a smooth profit and low
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Investors, creditors and financial analysts are interested in gaining more information about income smoothing in investee companies, especially if it would be effective on their deciding. The Finding of many researches shows that investors prefer a smooth profit and low fluctuation. Due to this fact, managers try to show the smoothness of growth rate and profit. This research wants to survey the influence of income smoothing in accepted companies society in securities exchange on information content of earnings. In this research, smoothing has measured during 2001-2005 income by using Eckle index, and the research is surveyed in 4 hypotheses type by companies dividing into two income smoothing and none smoothing. The results show income smoothing result in increasing the information content, and the main goal of smoothing is not information distortion. It should be considered that there is a positive relation between current and future income, and there is a direct and positive relation between future incomes with smoothed income of company. Also, it increases smoothing the information content of earnings with respect of future cash flow and the power of profit in future accruals which should be considered by users while deciding.
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