Impact of accrual quality on non-cash flow shock stock returns

One of the most important factors in selecting the best investment is stocks return. Considering the relationship between stock return and other accounting information, investors are able to allocate their own resources in the best manner. Accruals quality is one of the factors which affects on stoc...

Full description

Bibliographic Details
Main Authors: Daruosh Foroghi, Hadi Amiri, Mina Mohammadian
Format: Article
Language:fas
Published: University of Tehran 2014-06-01
Series:بررسی‌های حسابداری و حسابرسی
Subjects:
Online Access:https://acctgrev.ut.ac.ir/article_51723_3e4435fe335c722fdf686d431bb24765.pdf
Description
Summary:One of the most important factors in selecting the best investment is stocks return. Considering the relationship between stock return and other accounting information, investors are able to allocate their own resources in the best manner. Accruals quality is one of the factors which affects on stocks return. For so doing, a sample of 79 firms listed in Tehran Stock Exchange has been investigated in 2001-2012 time interval. In the current research, using a simple method based on Earning Response Coefficient (ERC), established stocks returns have been divided into non- cash flow shock and cash flow shock. The results indicate that stocks with good (poor) accrual quality are subject to relatively lower (higher) non-cash flow shocks. Overall, this study underscoperes the importance of controlling for cash flow shocks in asset-pricing tess that use realized returns.
ISSN:2645-8020
2645-8039