Abstract:
The purpose of this study is to investigate the relationship between the predicted and actual earnings per share overstating net operating assets in the petrochemical industry listed in the Iranian stock exchange. This study examines the conditions under which balance sheet inflation restricts the use of discretionary accruals for additional earnings management. In this study, using the logit regression method, 680 observations of 40 Iranian listed petrochemical companies from 2006 to 2023 were examined. The results show that there is a positive and significant relationship between the downward forecast earnings per share and the overvaluation of net operating assets. In addition, a positive and significant relationship was found between actual earnings management and the overstatement of net operating assets. These results suggest that when firms are subject to restrictions on the use of discretionary accruals, the likelihood of actual earnings management and downward earnings guidance increases to avoid the reporting of unexpected negative earnings.
Machine summary:
Research Article Earnings Per Share Forecast and Real Earnings Management Using Optimal Measurement of Operating Assets Reza Taheri Haft Asiyabi 1, *, Ameneh Naderi 2 1 Master's student at Urmia University, Faculty of Economics and Management, Department of Economics, Urmia, Iran htaheri.
com Received Date: 2024/11/19 Revision Date: 2025/01/16 Acceptance Date: 2025/02/20 Abstract The objective of this research is to investigate the relationship between earnings per share forecast and real earnings management with the net overstatement of operating assets in petrochemical industries listed on the Iran Stock Exchange.
Finally, the main objective of the present research is to investigate the relationship between earnings per share forecasting and real earnings management using optimal measurement of operating assets for petrochemical industries listed on the Iran Stock Exchange.
Given the review of literature and previous research, it is observed that numerous studies have addressed the effect of real earnings management on the accuracy of earnings forecasting as well as the role of optimal measurement of operating assets on the financial performance of companies.
Descriptive statistics of the data Third Quartile First Quartile Median Standard Deviation Mean Symbol Variable 3/339 4/892 2/118 1/212 3/591 BBS Balance sheet inflation Ownership INST 0/511 0/241 0/477 0/301 0/699 Institutional investors 0/281 2/090 0/465 0/230 0/836 LTG Company growth opportunity 5/445 0/689 5/393 5/024 5/825 SIZE Company size 0/249 0/214 0/175 0/110 0/276 MS Market share 0/294 0/491 0/222 0/122 0/416 FC Fixed costs Table (1) shows that 44 percent of the sample managed earnings by decreasing the earnings forecast.
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