Investigating the role of stock returns on the accuracy of management forecasts by modulating information asymmetry

Document Type : Original Article

Authors

1 Instructor of Accounting Payame Noor University, Iran

2 MSc. of Accounting, Payame Noor University, Mashhad, Iran

3 Associate professor of Accounting Payame Noor University, Iran

10.22034/iaas.2021.145159

Abstract

Guideline: One of the tools for corporate executives to interact with the market is to provide information about predicting the company's profits that can influence the market behavior. In general, it can be said that forecasting is the estimation of future events and the purpose of predicting risk reduction in decision making.
Objective: The research method used among listed companies in Tehran Stock Exchange is a quasi-experimental with post-event design, and a sample of 147 companies over the period 2012-2018 using multivariate regression using panel data method.
Methods: The results show that there is no significant relationship between stock return and earnings prediction accuracy by management, but there is a significant relationship between information asymmetry and earnings management accuracy. Also, the results show that information asymmetry does not moderate the relationship between stock returns and earnings management accuracy.
Results: It can be stated that stock returns do not increase or decrease the accuracy of management profit forecasting at high confidence levels, but increasing information asymmetry results in increased management forecast error and consequently management earnings forecast accuracy is reduced. . It can also be concluded from the results that it cannot be said that high level of information asymmetry moderates the relationship between stock returns and management profit prediction accuracy.   

Keywords

Accounting and Auditing Studies
Volume 10, Issue 40
January 2022
Pages 63-80

Files

Share

How to cite

Statistics