This paper studies the relation between earning volatility of firms and the future operating income predictability to define the effect of operating income volatility on investors’ expectations concerning future incomes. In other words, is there any possibility to predict future income using current volatility incomes? Logically it seems the present trend of companies will continue in future.For this purpose we considered the data of 120 companies which were admitted in Tehran Security Exchange Organization between 2003-2008. The examination was made based on regression analysis.The results indicate the meaningful and reverse relation between current volatility incomes and future operating income predictability. It also signifies that operating income predictability will increase In consequence of deducting accrual items from operating profits.

This study, using Dechew and Tang's (2009) framework, takes data from the firms listed in the Tehran stock exchange (TSE) in the period from 2000 to 2006 to analyze the relationship between EARNINGS volatility and EARNINGS predictability. Results indicate widely held managerial beliefs that EARNINGS volatility is negatively related to EARNINGS predictability. In addition, we find that the consideration of EARNINGS volatility brings substantial improvements in the prediction of both short- and long-term EARNINGS. Conditioning on volatility information also allows identifying implications of EARNINGS volatility for EARNINGS predictability.

In this study we investigate the relationship between EARNINGS management (EM) and four EARNINGS attributes (as proxies of EARNINGS quality). The four EARNINGS attributes used in this study are accruals quality, EARNINGS persistence, EARNINGS predictability, and EARNINGS smoothness. Especially we test opportunistic EM that predicts EM has unfavorable effects on various dimensions of accounting information quality. In order to test hypotheses the four EARNINGS attributes and discretionary accruals (as as proxies of EM) are measured for 303 firms during 2002-2009 period (total 1530 firm-year observations). Results show that an increase in discretionary accruals is accompanied by decreases in magnitude of EARNINGS attributes. Among those, accruals quality is more affected by EARNINGS management than the other attributes. In order to determine definitive effects of EARNINGS management on EARNINGS quality, we used cost of stockholders’ equity to rank EARNINGS attributes importance from investors’ perspective and to compute EARNINGS quality score for each firm. Results show that discretionary accruals damage EARNINGS quality.

The purpose of this study is to investigate the information content of a new risk measure (EARNINGS downside risk) in financial statement analysis, which is based on the below-expectation variability in EARNINGS. So, the relation between EARNINGS attributes, EARNINGS beta, EARNINGS volatility, return downside risk and negative skewness of stock return with EARNINGS downside risk were examined. Five main hypotheses and seven sub-hypotheses were defined and data were analyzed for 91 companies members of Tehran stock exchange of the period from 2000 to 2014. The research regression model was tested using panel data method. The results of research show that accruals quality, persistence, predictability, smoothing, timeliness, EARNINGS beta, EARNINGS volatility, return downside risk and negative skewness of stock return have a significant relation with the EARNINGS downside risk. Therefore, it can be calculated that information on this risk measures falls in the EARNINGS downside risk. Relevance and conservatism variables, although in regression analysis did not have a significant relation with the EARNINGS downside risk along with other risk factors, but in the correlation analysis, there is a significant and negative relationship with the EARNINGS downside risk.

This paper, examines the difference between empirical and expected frequency distribution of a sample consisting 3394 observations of EARNINGS, and investigates whether EARNINGS are managed to avoid earning decreases and losses. Also, it examines the pooled cross-sectional empirical distributions of scaled EARNINGS of the companies listed in Tehran Stock Exchange and finds a significant discontinuities in the form of unusually low frequencies in the interval immediately left of zero EARNINGS and unusually high frequencies in the interval immediately right of zero EARNINGS. It shows that managers manipulate EARNINGS upwards to shift it to the right of zero EARNINGS threshold to avoid losses. The study also reveals that managers of firms with a small pre-managed loss manipulate two components of EARNINGS, operating cash flow and working capital to manage their income. There was no evidence of manipulating EARNINGS to avoid EARNINGS decreases.

In this paper, we examine the effect of accounting conservatism on EARNINGS persistence and EARNINGS distribution. This survey uses nonoperating accruals and adjusted market to book ratio as a proxies for accounting conservatism. We employ financial data of 98 firms listed in Tehran Stock Exchange. Correlation coefficients and linear regression analysis were used to test hypothesizes. The first hypothesis examines relationship between conservatism and EARNINGS distribution. This hypothesis is based on agency theory and predicts there is a negative relationship between these variables. Our empirical results support the first hypothesis. Second hypothesis is based on critics about conservatism and predicts more conservative EARNINGS are less persistent. According to our empirical tests, there are not enough supportive significant evidences to accept (also to reject) this hypothesis. This result implies that more researches are needed to shed light on relationship between conservatism and EARNINGS persistence.