The Effect of Managers’ Capabilities on the Relationship between Environmetal unensurances and Profit Management and Stock Returns of Companies Admitted to the Tehran Stock Exchange

• Ramezani, Javad ^[1] ; Madhoosh, Mahmood ^[2]
  1. [1] Islamic Azad University

     Islamic Azad University

     Irán

     
  2. [2] MA Student, Accounting Department, Islamic Azad University, Noor Branch, Mazandaran,
• Localización: Revista Publicando, ISSN-e 1390-9304, Vol. 5, Nº. 14, 2 (Enero-Febrero-Marzo), 2018, págs. 119-140
• Idioma: inglés
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• Resumen

  • The goal of this research is reviewing the relationship between environmental uncertainty (calculated by sale coefficient of variation and variability of estimated earnings per share) and earning management and return on stocks. Then it will be reviewed whether management capability impacts on this relationship. For this purpose, it has been selected 119 companies from Tehran Stock Exchange listed companies from 2011 to 2015 and research hypotheses have been tested by correlation and multivariable regression statistical methods. The results showed that to face environmental uncertainty, managers try to earning management to decrease earnings fluctuations. It also showed that market understands environmental uncertainties which are created by customers (sale coefficient of variation) and reacts against these uncertainties (these types of uncertainties have informational content) but not against environmental uncertainties rise from manager’s doubt about EPS. Consequently, the results showed that the capability of managers of sample companies within research interval has no significant impact on the relationship between environmental uncertainties and earning management and return on stocks.