The Investigation of Effective Indices on Conservatism in Companies Acquired in Tehran Stock Exchange

Abstract

In this research, the effect of conservatism on earnings management and capital structure of listed companies in Tehran Stock Exchange has been investigated. The research population consisted of all companies listed in Tehran Stock Exchange during the period of 2005-2015. The research method is descriptive-survey and correlation type. The sample size is 120 companies based on the Cochran formula. The required data from the software was extracted. Datasheet analysis was used to analyze the data. Chow model, Hausman and combined regression were used. In the first model, coefficients of short and long-term debt ratio ratios to capital, and in the second model, the ratio of debt to capital, company size and asset return at a significant level of 5%, the remaining coefficients are not significant, and the amount of the R2 (coefficient of determination). The model suggests that 87% of the variations of the dependent variable with the independent and controllable variables can be explained, and the Durbin-Watson statistics reject the assumption of self-correlation between the components of the model. The results showed that conservatism on the structure of capital and the management of the profits of private companies were accepted in Tehran Stock Exchange.

Keywords: Conservatism, Profit, Accepted Companies, Tehran Securities.

DOI: 10.7176/RHSS/9-12-09

Publication date:June 30^th 2019