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Management Science Letters

ISSN 1923-9343 (Online) - ISSN 1923-9335 (Print)
Quarterly Publication
Volume 8 Issue 9 pp. 933-938 , 2018

The effect of financial distress on earnings management and unpredicted net earnings in companies listed on Tehran Stock Exchange Pages 933-938 Right click to download the paper Download PDF

Authors: Samin Ranjbar, Gholamreza Farsad Amanollahi

DOI: 10.5267/j.msl.2018.6.015

Keywords: Financial distress, Tehran Stock Exchange, Earning management

Abstract: Many financial crisis are related to public corporations, which are increasing. Many investors and creditors are having trouble predicting a financial crisis, especially when managing profits. Recent studies identify the factors associated with earnings management to determine the relationship between the factors and manipulated profits. In order to reduce the risk of financial crises and to help investors avoid large losses in the stock market, it is necessary to develop a model for predicting profit management. In addition, for traditional auditing technologies, it is also difficult to limit the time, human resources, costs, and the impact of abnormal behaviors on complex and large financial information. Therefore, developing a prediction model for managing profits for auditors is useful in identifying the degree of manipulation in financial statements. This paper examines the effect of corporate financial distress on unpredicted net earnings and corporate profits on accepted companies in Tehran Stock Exchange over the period 2010-2015. The models used to test the hypotheses of the research are linear regression using panel data. The results show that the coefficients of the financial distress, institutional ownership, annual sales growth, company loss, company size, the company's market share and firm fixed costs are statistically meaningful. In other words, these independent variables influence on unforeseeable profit and earnings management.

How to cite this paper
Ranjbar, S & Amanollahi, G. (2018). The effect of financial distress on earnings management and unpredicted net earnings in companies listed on Tehran Stock Exchange.Management Science Letters , 8(9), 933-938.

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Journal: Management Science Letters | Year: 2018 | Volume: 8 | Issue: 9 | Views: 4322 | Reviews: 0

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