FINANCIAL ACCOUNTING
Year:2009 | Volume:1 | Issue:3|Papers Count:9

This paper investigates the association between components of income statement, components of cash flow statement and stock returns. A sample of 65 companies listed in Tehran Stock Exchange for the time period of 2006-2008. Regression analysis is conducted to test the research hypotheses. Results show that among components of income statements, the net income (loss), and among components of cash flow statement, cash flows from investing activities have a strong relationship with stock returns. However, the paper results show that there is a stronger association between stock returns and components of income statements relative to components of cash flows statement.

In this paper the relationship between the accruals estimation error and earnings quality has been examined. The quality of accruals is calculated by standard deviation of the residuals in model, which is introduced by Dechow and Dichev (2002), and quality of earnings is measured based on its persistence. For the test of our research hypothesis, we used the listed firms in Tehran Stock Exchange (TSE) from 1999 to 2005. The results show that the earnings persistence decreases when the estimation error of accruals increases. Hence, since the earnings persistence has a positive relationship with earnings quality, we may conclude a negative relationship between accruals estimation errors and earnings quality. Therefore, in the listed firms in TSE, with an increase in the estimation error of accruals, the earnings quality decreases. These are consistent to some previous empirical researches such as Dechow (1994), Dechow and Dichev (2002).

Earnings and book value are commonly used as the basis for firm valuation. However, the reliability of earnings, as indicated by earnings management, may affect its relevance in determining firm value. This research investigates the link between earnings management and firm valuation by assessing the impact of earnings management on the value-relevance of earnings and book value. Total discretionary accruals are estimated using the Jones model. The population of the research is consisted of the companies listed in Tehran Stock Exchange between the period between 1381 to 1386. This research provides evidence that earnings management plays a role in the valuation process. Earnings management via discretionary accruals reduces the value-relevance of earnings and increases the value-relevance of book value.

Present study investigates the relation between earnings quality and earnings persistence of the companies listed in Tehran stock exchange. The population, measure of earnings quality, is investment in capital assets and human resource. The sample of this study consists of firms of 8 industries between the periods of 1378-1386. Findings of presort research show that in 5 industries, there is a relation between earnings quality and earnings persistence. In 3 other industries we did not find and significant relationship between the two variables.

This study examines the short time price effect of dividend announcements during a boom and a recession in Tehran Stock Exchange. The data used in this study is collected from TSE between the period of 1382-1383, when it was a boom and the period of 1384 - 1385 when it was a recession. The empirical results show that the abnormal returns of dividend announcements during the recession were positive and during the boom were negative and the results from the overall samples state that the abnormal returns during the recession were positively slightly higher than during the boom. This paper is mostly in line with the theory that investors respect dividends more during bad times than good times.

In this study; according to the role of accounting earnings and cash flow from operations as the base of decision-making and prediction, we examine the value relevance and information contents of accounting earnings and its components in the Tehran stock exchange. This is done by testing relationship between stock returns and accounting earnings and its components including: operating income, income before taxes, net income, accruals and cash flow from operation. The examine of hypothesis is done with the usage of pooled data related to the 331 selected companies among the accepted companies of Tehran stock exchange from 1380 to 1386.To calculate the stock returns changes, also independent and dependent variables, Excel program has been used. For statistical tests, values of coefficients and obtain the necessary statistical analysis used Pearson's correlation coefficients, simple and multiple linear regression, T, F, DW, and Wald statistics. Results show that operating income, income before taxes and net income have explanatory power of stock returns and are value relevant. Net income has the highest power of explaining returns than the other variables and explains about 37% of changes of stock returns. Furthermore, results indicate cash flow from operations and accruals are not value relevant. On the other hand operating income, income before taxes, cash flow from operations and accruals do not have incremental information content beyond net income.

Performance measurement has important role in financial decision making. There are various methods for performance measurements. But selecting one of them is the subject that leads to many researches in financial literature. The main goal of this paper is to survey the relationship between Tobin's-Q, as a measure of performance and Stock Returns, MVA and ROA as other measures of performance. Therefore, 216 firms of population that their necessary information for an eleven years period was available are selected. Then information about 3 independent variables is studied and Tobin's-Q was measured as the dependent variable. Simple regression technique was used to test the hypotheses. The significance of the models was tested according to t-test and F-test. The conclusions indicate that there isn't any significant relationship between Tobin's-Q and annual stock returns. There are significant and positive relationships between Tobin's-Q and MVA and ROA.

Nowadays, investors take a broad rang of features into consideration. However, there has been little investigation on the methods of choosing different options between investors. Investors decision-making grow more complicated and get more risky day by day and the results of these decision-makings can have an important affect on the people's lives, especially when retiring. We have little information about the effective factors on investor's decision-making. The following research will use an analytical approach in order to investigate these factors on investor's decision-making when buying shares. The same approach has been used in investigating choices of non-financial products which are effective on decision-making. Population in this research is those investors who are active in the market directly, and are partner in the company management indirectly. We use random sampling approach for selecting investors. Data was analyzed by SPSS program computer. The results illustrate that investors are less enthusiastic in risky transactions and speculation. Furthermore, financial priorities are much related to each other in decisions for buying shares. However, their importance is less than price fluctuations and also the trend of share prices in stock markets.