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ISSN : 2233-4165(Print)
ISSN : 2233-5382(Online)
Journal of Industrial Distribution & Business Vol.4 No.1 pp.15-21
DOI : https://doi.org/10.13106/jidb.2013.vol4.no1.15

The Amount of Earnings Per Share’s Adjustment and Earnings Management

Monireh Paricheh*, Alireza Mehrazeen**, Mahmoud Mousavi Shiri***

*, **Department of Accounting, Islamic azad university, Neyshabur Branch, Iran.
***Department of Management, Economics and Accounting, Payame Noor University, I.R. of Iran.

Received: March 20, 2013. Revised: May 21, 2013. Accepted: June 17, 2013.

Abstract

Purpose - Our goal was to determine whether there is arelationship between actual profits’ deviation from the profits expectedin earnings per share’s adjustment announcements and the degree ofapparent earnings management in annual financial statements.
Research designs, data and methodology - The samples consisted of133 companies from ten industries. The companies were selectedamong those listed in the stock exchange, and their data wereexamined covering the two-year period from 2008 to 2010. Testswere conducted using a regression model and SPSS statisticalsoftware.
Results - The findings indicate the following. There is nosignificantly positive relationship among the last earnings per share’sadjustment forecast, the first earnings forecast per share, and earningsmanagement. Moreover, the amount of the latest earnings per share’sadjustment forecast relative to its first forecast is not associated withthe companies’ discretionary accruals items. Finally, the hypothesisthat a relationship exists between companies’latest adjustments of theirearnings per share and earnings management was tested the resultsindicate that there is no such relationship.
Conclusion - The study’s results suggest that the amount ofearnings per share’s adjustment is not a motivation for earningsmanagement.



Keywords : Earnings Per Share, Earnings Per Share’s Positive Adjustment, Earnings Per Share’s Negative Adjustment, Earnings Management.

JEL Classifications : M41, N25, O16.

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