The effect of earnings volatility on profit forecast error with an emphasis on income smoothing
Journal Title: International Research Journal of Applied and Basic Sciences - Year 2015, Vol 9, Issue 12
Abstract
Profit is one of the major items of the financial statements, which drew the attention of the users of financial statements. Information provided by a company and thus profit is based on past events, but investors need information about the firm's future. Managements of commercial units having the resources offer reliable forecasts and increase financial markets efficiency by public release of these forecasts. This paper examines the impact of earnings volatility on profit. Accordingly, the effect of volatility on profit forecast error with an emphasis on income soothing during 2009 to 2013 based on a sample consisting of 13o companies listed in Tehran Stock Exchange was investigated. Results indicate that the effect of earnings volatility on companies’ profit forecast suggest that profit forecast error is significantly different among smoother and non-smoother companies.
Authors and Affiliations
Mehdi Soheyli Sarv| Master of Accounting, Department of Accounting, Hamedan Branch, Islamic Azad University, Hamedan, Iran., Mohammad Ghorban Mehri| PhD of Accounting, Department of Accounting, Hamedan Branch, Islamic Azad University, Hamedan, Iran., Mohammad Reza Karimi Pooya| PhD of Accounting, Department of Accounting, Hamedan Branch, Islamic Azad University, Hamedan, Iran.
Keywords
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