Economic Uncertainty and Earnings Management: Evidences from listed Companies at Tehran Stock Exchange

Document Type : Original Article

Authors

1 Faculty member of Azad University, Karaj Branch

2 Assistant Professor, Accounting group,faculty of management and economy, Islamic Azad University science and research branch, Tehran, Iran

3 Master of Accounting, Islamic Azad university science and research branch, Tehran, Iran

10.22034/iaar.2022.156641

Abstract

In this thesis, we investigate that how the “Economic Uncertainty” affects reporting and managing accounting earnings, which is one of the most important features of managers’ decision making. The investigated Data set consists of Earnings Management and Economic Uncertainty indexes of about 163 listed companies in Tehran Stock Exchange during the period of 2010 to 2017 (1141 firm-year), which are gathered in Balanced Panel structure and are estimated and analyzed with linear multi-variable regression. “Economic Uncertainty” and “Earnings Management” are calculated accordingly, based on the standard deviation of earnings per share and modified Jones model. we found a positive and statistically important relationship between Economic Uncertainty and Earnings Management in Iran. On the other hand, in Iran, in case of increasing standard deviation of earnings per share, managers use Earnings Management more to control undesirable earnings variation, and in reverse, in case of decreasing standard deviation of earnings per share, they fewer use Earnings Management.

Keywords

Accounting and Auditing Research
Volume 14, Issue 54
July 2022
Pages 5-20

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