The effect of conservatism over the accrual based, real and aggregate earnings management in the companies listed in Tehran Stock Exchange (TSE)

Subject Areas : Management Accounting

عبدالمهدی انصاری ¹ (ندارد)
مصطفی دری سده ² (ندارد)
علی شیرزاد ³ (ندارد)

Received: 2012-08-25 Accepted : 2012-11-10 Published : 2014-03-13

Keywords: Conservatism, Aggregate level of earnings ma, Accrual based&#x0D, &#x0D, earning manage, Manipulation of real activitie,

Abstract :

The manager often manage earnings to hustle the stockholders. So, it is ususal thatstockholders say earnings management is bad and try to control managers.Stockholders believe that conservatism is a control object that limits earningsmanagement. This study investigates probable effect of conservatism on earningsmanagement. An untested common assumption in prior literature is that conservatismlimits the opportunitiesforsuccessful accruals-based earnings management. Samplingpopulation of the present study includes 135 accepted companies at Tehran stockexchange and manufacturing parts in the time period of 2006 to 2011.In this study weuse jones model and Kothari for measuring accrual management and realmanagement, and for measuring conservatism we use from Garcia et al study.In thisstudy we find a negative associationbetween conservatism andaccrualsearningsmanagement, and a positive association between conservatism and real earningsmanagement. Also we testeffect of conservatism onAggregate level of earningsmanagement and we find a negative associationbetween conservatism andAggregatelevel of earnings management.

References:

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