Investigating the Effect of Firm Growth on the Relationship between Discretionary Accruals and Firm Future Performance

Document Type : Original Article

Authors

1 Assistant Professor of Economic, Isfahan University, Isfahan

2 M.A. in Accounting, University of Isfahan

Abstract

The main objective of this study was to evaluate the effect of  firm growth on the relationship between discretionary accruals and future performance of the company. For this purpose, a sample of 84 companies via was selected the systematic elimination of the firms listed in the Tehran Stock Exchange during the years 1392 to 1384. In this study, to determine the non-discretionary and discretionary accruals sections Jones, model (1991) was used to determine the future performance, cash and net profit were used in the coming year. Then the research hypotheses were tested using the regression model panel data. The results showed that the overall firm growth does not have an impact on the relationship between discretionary accruals and future performance of the company. But in the companies with high growth the impact is greater than other companies use of positive discretionary accruals, to reflect the desirable performance of the firm (transfer good news). And positive discretionary accruals include information content.

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