The Effect of Accruals Management to Avoid Losses

Document Type : Original Article

Authors

1 Corresponding Author: PH.D. Candidate in Accountancy, Faculty of Management and Accounting, Shahid Beheshti University, Tehran, Iran

2 Associate Professor, Department of Finance, Faculty of Management and Accountancy, Shahid Beheshti University, Tehran, Iran

Abstract

There is no comprehensive agreement in the research literature that managers manage earnings in order to avoid losses, especially through accruals. Thus The main purpose of this research is to investigate the effect of accruals management to avoid losses in firms listed in Tehran Stock Exchange. The dependent variable is earnings per share (EPS), which is calculated the ratio of net profit to the number of shares. To measure accruals, the Forward-looking accruals model was used that calculated the difference between accruals and abnormal accruals. The statistical population of the study consisted of 207 firms listed in Tehran Stock Exchange between 2015-2021. The results of the regression showed that there is a positive correlation between the discretionary accruals and the probability of profit of each share will be zero. These results show that firms with beat the zero EPS have high volatility accruals compared to other companies. Accordingly, the research hypothesis is accepted.

Keywords

References

بلکویی، احمد (2004). تئوری­های حسابداری (ترجمه دکتر علی پارسائیان) (چاپ دوم). تهران: انتشارات ترمه.
ثقفی، علی و پوریانسب، امیر (1389). نظریه مدیریت سود. فصلنامه مطالعات حسابداری و حسابرسی، 2(6)، 34، 69-41.
دستگیر، محسن و حسینی، احسان. (1392). مروری جامع بر مدیریت سود (بخش اول). فصلنامه مطالعات حسابداری و حسابرسی، 2(7)، 4، 9-6.
سعیدی، علی، حمیدیان، نرگس و ربیعی، حامد (1392). رابطه­ بین فعالیت‌های مدیریت سود واقعی و عملکرد آتی شرکت‌های پذیرفته شده در بورس اوراق بهادار تهران. فصلنامه علمی پژوهشی حسابداری مدیریت، 6(2)، 58-45.
سوری، علی (1394). اقتصادسنجی همراه با کاربرد Eviews و Stata (جلد اول) (چاپ چهارم). تهران: نشر فرهنگ شناسی.
مرادی، جواد و باقری، هادی (1393). بررسی مقایسه­ای تأثیر کوته­بینی مدیریت و مدیریت سود بر بازده سهام. بررسی­های حسابداری و حسابرسی، 21(2)، 250-229.
مشایخی، بیتا و حسین­پور، امیرحسین (1395). بررسی رابطه بین مدیریت سود واقعی و مدیریت سود تعهدی در شرکت‌های مشکوک به تقلب بورس اوراق بهادار تهران، فصلنامه علمی پژوهشی مطالعات تجربی حسابداری مالی، 13(49)، 52-29.
مشایخی، بیتا و صفری، مریم. (1385). وجه نقد ناشی از عملیات و مدیریت سود شرکت­های پذیرفته شده در بورس اوراق بهادار تهران، بررسی­های حسابداری و حسابرسی، 13(2)، 54-35.
نوروش، ایرج، سپاسی، سحر و محمدرضا، نیکبخت (1384). بررسی مدیریت سود در شرکت­های پذیرفته شده در بورس تهران. مجله علوم اجتماعی و انسانی دانشگاه شیراز، 22(2)، 177-165.
Ayers, B., Jiang, J., Yeung, E. (2006). Discretionary accruals and earnings management: An analysis of pseudo earnings targets. The Accounting Review, 81: 617–652.
Bhoiraj, S., Hribar, P., Picconi, M., & McInnis, J. (2009). Making sense of cents: An examination of firms that marginally miss or beat analyst forecasts. The Journal of Finance, 64 (5):23-59
Burgstahler, D., Dichev, I., (1997). Earnings management to avoid earnings decreases and losses. Journal of Accounting and Economics, 24, 99–126.
Caylor, M. L., Christensen, T. E., Johnson, P. M., & Lopez, T. J. (2015). Analysts’ and Investors’ Reactions to Consistent Earnings Signals. Journal of Business Finance & Accounting, 42(9-10), 1041–1074.
Cohen, D., Day, A., Lys, T. (2008). Real and accrual-based earnings management in the pre- and post-Sarbanes-Oxley periods. The Accounting Review, 83: 757-787.
Darmawan, I. P. E., Sutrisno; T., & Mardiati, E. (2019). Accrual Earnings Management and Real Earnings Management: Increase or Destroy Firm Value?. International Journal of Multicultural and Multireligious Understanding, 6(2), 8–19.
Dechow, P., Richardson, S., & Tuna, I. (2003). Why are earnings kinky? An examination of the earnings management explanation. Review of Accounting Studies, 8, 355–384.
Degeorge, F., Patel, J., Zeckhauser, R. (1999). Earnings management to exceed thresholds. Journal of Business, 72: 1–33.
Demski, J.S. (2004). Endogenous expectation. The Accounting Review, 79: 229-931.
Graham, J. R., Harvey, C. R. & Rajgopal, S. (2005). The economic implications of corporate financial reporting. Journal of Accounting and Economics, 40, 3-73.
Gunny, K. A. (2010). The Relation Between Earnings Management Using Real Activities Manipulation and Future Performance: Evidence from Meeting Earnings Benchmarks. Contemporary Accounting Research, 27(3): 855-888.
Kamarudin, K. A., & Ismail, W. A. W. (2014). The risk of earnings quality impairment. Procedia - Social and Behavioral Sciences, 145, 227-228.
Kuo, J. M., Ning, L., & Song, X. (2014). The Real and Accrual-based Earnings Management Behaviors: Evidence from the Split Share Structure Reform in China. The International Journal of Accounting, 49: 108.
Rahman, M. M., Moniruzzaman, M., & Sharif, M. J. (2013). Techniques, Motives and Controls of Earnings Management. International Journal of Information Technology and Business Management, 11(1): 29-31.
Ridwan, M. A. & Gunardi, A. (2013). Peran Mekanisme Corporate Governance Sebagai Pemoderasi Praktik Earnings Management Terhadap Nilai Perusahaan. Trikonomika, 12(1), 49–60.
Roychowdhury, S. (2006). Earnings Management through Real Activities Manipulation. Journal of Accounting and Economics, 42 (3): 335-370.
Sanjaya, P. S., Saragih, M. F. (2012). The effect of real activities manipulation on accrual earnings management: The case in Indonesia stock exchange (IDX). Journal of Modern Accounting and Auditing, 8(9), 1291-1300.
Sayari, S. & Omri, A. (2017). Earnings Management, Accruals and Stock Liquidity. Journal of Finance and Bank Management, 5(1), 17-28.
Xu, W. (2016). Accruals management to avoid losses. Journal of Business Finance & Accounting, 43(9-10): 1095-1120.
 
Budget and Finance Strategic Research
Volume 2, Issue 3 - Serial Number 7
Autumn Quarterly
December 2021
Pages 87-112

Files

History

  • Receive Date: 27 November 2021
  • Revise Date: 08 January 2022
  • Accept Date: 08 January 2022

Share

How to cite

Statistics