Abstract:
This paper analyzes the relationship between capital structure and earning management. For analyzing we use 119 non-financial companies that listed in Tehran Stock Exchange from 2000 to 2008. The researchers will focus on comparing the Jones Model and the Modified Jones Model, which are the two most frequently used model in empirical analysis nowadays. Earnings management is a kind of management which uses accounting techniques to meet the executives. Researchers in this area found many approaches to detect the earnings management; within these approaches are the discretionary accrual models which include the modified. Our findings suggested a positive relationship between debt ratio and discretionary accruals is (0.000). Also there is a negative association between return on assets (ROA) and debt ratio. Finally return on equity and total assets related positively with debt ratio.
Machine summary:
The Relationship between Earning Management and Capital Structure Receipt: 20, 9 , 2013 Acceptance: 2, 12 , 2013 Fraydoon Rahnamay Roodposhti Professor of Islamic Azad University, Science and Research Branch, Tehran Farhad Arabahmadi Faculty Member of Accounting, Shahrood University of Technology Aliasghar Arabahmadi Ph. D.
Researchers in this area found many approaches to detect the earnings management; within these approaches are the discretionary accrual models which include the modified.
earning management, capital structure, debt ratio, return on assets, return on equity, total assets 37 1- Introduction The one of the most important challenge faced by researchers as well as academician is that they are unable to fine study the component of earnings management accruals (Beneish, 2001).
Earlier studies on earning management through real activities manipulation have focused mainly on investment activities, such as reductions in expenditures on research and development (Baber et al, 1991; Bushee, 1998; Bens et al, 2003).
The Jones model (Jones, 1991) and the modified Jones model (Dechow, Sloan, & Sweeney, 1995) were created to try eliminate the discretionary element of the accruals, by taking into consideration changes in the economic environment (Beneish, 2001).
This study investigates the extent to which the positive associations between alternative discretionary accrual measures and earnings management.
Our findings suggest the tentative facts of earning management since we have applied the Tahir (2011) model in measuring the discretionary accruals, debt ratio to measure the capital structure and to measure the size of firm we take figure of total assets of firms.
Keywords:
Capital structure
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Return on assets
،
earning management
،
return on equity
،
debt ratio
،
total assets
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Earnings Management Capital Structure Non
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The Relationship Earning Management Capital
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Relationship Earning Management Capital Structure
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The ROE ROA Tehran
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