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The Effect of Global Financial Crisis on Earnings Quality | ||
| مجله دانش حسابداری | ||
| Article 2, Volume 8, Issue 4 - Serial Number 31, February 2018, Pages 37-64 PDF (1.02 M) | ||
| Document Type: Research Paper | ||
| DOI: 10.22103/jak.2017.10347.2403 | ||
| Authors | ||
| Mohammad Hossein Safarzadeh (Ph.D)* 1; Reza Vahedian2 | ||
| 1Assistant Professor of Accounting, Shahid Beheshti University, Tehran, Iran. | ||
| 2M.A. of Accounting, Shahid Beheshti University, Tehran, Iran. | ||
| Abstract | ||
| In the global financial crisis, managers are under pressure, and to avoid bankruptcy, they manipulate financial information or hide them to postpone financial distress, using their authorities in applying accounting standards and doing estimates and forecasts. This study investigates one of the most important factors affecting earnings quality, using seven criteria to measure earnings quality, including ex-post and ex-ante conservatism, value relevance, accruals quality, earnings persistence and earnings smoothing, as well as a zero-one dummy variable to introduce the absence or presence of global financial crisis, totally in the multivariate regression and panel data models. This study used data collected from a sample of 148 firms in the Tehran Stock Exchange in the years 2005 to 2015. Findings showed that the global financial crisis improves quality of earnings through positive impacts on some criteria of earnings quality, including earnings persistence and smoothing, and reduces quality of earnings through negative impacts on some other criteria, including conservatism, value relevance, accruals quality and earnings predictability. The findings also indicated that quality of earnings before the period of global financial crisis is more than that during the crisis. | ||
| Keywords | ||
| Global Financial Crisis; Earnings Quality; Accounting Conservatism; Accruals Quality; Earnings Smoothing | ||
| References | ||
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Kamyabi, Y., Malekian, E. (2012). Investigating effect of global financial crisis on liquidity ratios: Evidence from Iran, M.A. Thesis, Mazandran University [In Persian].
Safarzadeh, M.H. (2013). Earning quality and its measurement criteria. Journal of Accounting Research, 3(1), 125-145 [In Persian].
Sepasi, S., Hassanzadeh, M. (2016). Impact of corporate social responsibility on the economic stability. Journal of Value and Behavioural Accounting, 1(1), 123-138 [In Persian].
Vali Pour, H., Talebnia, G.A. (2014). Effect of profit management on earnings quality of companies with financial crisis. Journal of Accounting Knowledge, 4(13), 75-150 [In Persian]. | ||
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