Investigating the effect of rounding and revision in predicting earnings per share on investors' attention

Subject Areas : Financial Accounting

Ayat Bijani ¹ , Iraj Nouri ²

1 - Department of Accounting, Arak Branch, Islamic Azad University, Arak, Iran
2 - Department of Industrial Management, Arak Branch, Islamic Azad University, Arak, Iran

Received: 2017-10-08 Accepted : 2019-01-17 Published : 2019-03-01

Keywords: Revision, Rounding, Predicting Earnings, Share,

Abstract :

Because in the theory of economics, the value of a company is based on the current value of future cash flows and profit is used as a substitute for cash flows, profit forecasting is of particular importance. In the research, the effect of rounding and revision in predicting earnings per share on the investors' attention in Iran has been investigated. After designing the investors' attention assessment indexes, the transaction information was collected from the Stock Exchange in the five-year period of 2011-2015. The statistical sample consists of 120 companies selected by systematic elimination method and totally obtained 600 year-firm. In this research, linear regression and correlation were used to investigate the hypotheses of the research and Eviews software was used to analyze the data and test the hypotheses. What can be said in the summing up and conclusion of the test of research hypotheses is that predicting the earning per share influences investors 'attention, as well as the revision of the earnings per share influences the investors' attention. On the other hand, research studies show that the rounding in interaction with the revision in predicting earnings per share can also affect the investors' attention.

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