Explanation the Relationship between Accounting Earnings Volatility and Predictability
| Autor: | Bita Mashayekhi, Vahid Mennati |
|---|---|
| Jazyk: | perština |
| Rok vydání: | 2012 |
| Předmět: | |
| Zdroj: | مطالعات تجربی حسابداری مالی, Vol 10, Iss 40, Pp 101-124 (2012) |
| Druh dokumentu: | article |
| ISSN: | 2821-0166 2538-2519 |
| Popis: | In this study we investigate the relationship between earnings volatility and earnings predictability (short and long-term), in addition we investigate information content of earnings volatility. Our framework is based on Dichev and Tang (2009). There is a belief that higher earnings volatility indicates lower earnings predictability. So according to their framework, financial information of the 400 companies listed in the Tehran Stock Exchange (TSE) from 2002 to 2012 were investigated. Although the predictability trend is not to be strict lower, But the results of this section suggest that earning volatility reduces the predictability of earnings. Moreover, the strength of long-term predictability is reduced. Additionally the loss company (Based on the theoretical framework that losses causes earnings volatility.) excluded and the tests were repeated but similar results were obtained. In the second section of the paper the relationship between the market reaction and earnings volatility was examined. Evidence suggests that the market will demand a higher return for companies with high volatility (higher risk). |
| Databáze: | Directory of Open Access Journals |
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