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The effect of Income smoothing on firm's information uncertainty, stock returns and cost of equity
- Source :
- بررسیهای حسابداری و حسابرسی, Vol 18, Iss 64, Pp 91-112 (2011)
- Publication Year :
- 2011
- Publisher :
- University of Tehran, 2011.
-
Abstract
- This study investigated the effect of income smoothing on information uncertainty, stock return and cost of equity. For income smoothing two indices are used: total accruals smoothing and discretionary accruals smoothing. With accurate study of literature we hypothesized three possibilities and selected 111 companies listed in Tehran stock exchange as our survey for a period of three years, 1385-1387. In this study, Ohlson and Juttner- Narouth models were used to collect data. Our hypotheses were analyzed using multiple liner regressions and F and T tests. Our results showed that income smoothing caused reduction in information uncertainty in selected companies. It also showed that when fluctuations related to unexpected stock earnings are controlled, income smoothing 5 days before and after earnings announcement has no effect on companies' stock return. Finally our data showed that income smoothing has no effect on cost of equity.
Details
- Language :
- Persian
- ISSN :
- 26458020 and 26458039
- Volume :
- 18
- Issue :
- 64
- Database :
- Directory of Open Access Journals
- Journal :
- بررسیهای حسابداری و حسابرسی
- Publication Type :
- Academic Journal
- Accession number :
- edsdoj.9a445b32da354197abc18e9d7ef2fb5f
- Document Type :
- article