International Journal of Financial Management

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The Relationship Between Prior Period Adjustment and Earnings Management in Tehran Stock Exchange (TSE)


     

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This paper examines the relationship between Prior Period Adjustment (PPA) and Earnings Management (EM) in Tehran Stock Exchange (TSE). In other words, this study seeks to answer the question as to whether restatement causes the EM or not. For this purpose, a sample of 81 companies was selected and examined during the period of 2002 to 2010 in six industry using panel data with fixed effect model. Modified Jones model (1991) is used for measuring of EM. To test hypotheses, multiple regression models and Pearson correlation coefficients are used. Results indicate that there is no significant relationship between PPA and EM in TSE.

Keywords

Prior Period Adjustment, Earnings Management, Tehran Stock Exchange
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  • The Relationship Between Prior Period Adjustment and Earnings Management in Tehran Stock Exchange (TSE)

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Abstract


This paper examines the relationship between Prior Period Adjustment (PPA) and Earnings Management (EM) in Tehran Stock Exchange (TSE). In other words, this study seeks to answer the question as to whether restatement causes the EM or not. For this purpose, a sample of 81 companies was selected and examined during the period of 2002 to 2010 in six industry using panel data with fixed effect model. Modified Jones model (1991) is used for measuring of EM. To test hypotheses, multiple regression models and Pearson correlation coefficients are used. Results indicate that there is no significant relationship between PPA and EM in TSE.

Keywords


Prior Period Adjustment, Earnings Management, Tehran Stock Exchange

References