Earning Downside Risk and Market-based Characteristics Earning Attributes

Subject Areas : Journal of Investment Knowledge

Mehdi Dasineh ¹ , Farzaneh heidarpoor ² , Yadollah Tariverdi ³

1 - Ph.D. Student in Accounting, Faculty of Economic and Accounting, Central Tehran Branch, Islamic Azad University,Tehran,Iran.
2 - Department of Accounting, Central Tehran Branch, Islamic Azad University, Tehran, Iran (Corresponding Author
3 - Department of Accounting, Central Tehran Branch, Islamic Azad University,Tehran, Iran.

Received: 2019-10-27 Accepted : 2019-11-03 Published : 2021-12-22

Keywords: Earning volatilities, Earning Downside Risk, Market-based Characteristics Earning Attributes,

Abstract :

According to modern approaches, the risk was defined as loss probability. In fact, rather than taking into account desirable and undesirable changes, only undesirable changes are considered as risks. On the other hand, measuring downside risk using earning rather than return is considered a new issue. The purpose of the present study is to measure the Earning Downside Risk using earning and to evaluate its effectiveness from market-based criteria of earning characteristics. Earnings downside Risk Index, with a new approach, has been evaluated as an index of risk assessment and the characteristics of relevance, timeliness and conservatism as market-based indicators of earnings characteristics.Using the data of 110 selected companies listed in Tehran Stock Exchange from 2012 to 2017 and multiple regression tests, the relevance and conservatism indices have an adverse and negative effect on the earning downside risk and between factor of the timeliness and downside risk no significant relationship was found.

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