Accounting and Auditing Studies

Accounting and Auditing Studies

Investigating the Implication Expenses Classification Shifting on Post-IPO Stock Performance

Document Type : Original Article

Authors
Yasser Shirzadi 1
Mehran Matinfard 2
Mohammad Hassani 2
1 Ph.D Candidate, Department of Accounting, Faculty of Management, North Tehran Branch, Islamic Azad University, Tehran, Iran
2 Assistant Prof, Department of Accounting, Faculty of Management, North Tehran Branch, Islamic Azad University, Tehran, Iran
10.22034/iaas.2023.179240
Abstract
Earnings management has always been one of an important area of accounting Literature. Manager's alwals have the tools at their disposal, through which they can manipulate firm earning under their management. One of this the tools and methods is classification shifting. The purpose of this study is to investigate the expenses classification shifting in firm with initial public offerings on the Tehran Stock Exchange and its relationship with post-offer returns. For this purpose, a sample consisting of 70 initial public offerings during the years 2004 to 2019 was examined using cross-sectional regression using the ordinary least squares method. Findings show that there is a positive relationship between non-operating expenses and unexpected operating Earnings in the year before IPO and a negative relationship with changes in its. In general, the research findings indicate that the firm with initial public offerings on the Tehran Stock Exchange, in the year before the public offering, are engaged in expenses classification shifting and inflate their operating Earnings; but this Earnings management has no effect on post-IPO returns.
Keywords
Classification Shifting
Initial Public Offering (IPO)
Earnings Management
Post IPO Return
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Accounting and Auditing Studies
Volume 12, Issue 46
Summer 2023
Pages 65-88