Univrsity Of Tehran Press Accounting and Auditing Review 2645-8020 21 2 2014 06 22 Impact of accrual quality on non-cash flow shock stock returns Impact of accrual quality on non-cash flow shock stock returns 173 188 51723 10.22059/acctgrev.2014.51723 FA Daruosh Foroghi Assistant Prof., Accounting, University of Isfahan, Isfahan, Iran. 0000-0002-7164-6728 Hadi Amiri Assistant Prof., Economics, University of Isfahan, Isfahan, Iran Mina Mohammadian MSc. Accounting, University of Isfahan, Isfahan, Iran. Journal Article 2014 04 08 One of the most important factors in selecting the best investment is stocks return. Considering the relationship between stock return and other accounting information, investors are able to allocate their own resources in the best manner. Accruals quality is one of the factors which affects on stocks return. For so doing, a sample of 79 firms listed in Tehran Stock Exchange has been investigated in 2001-2012 time interval. In the current research, using a simple method based on Earning Response Coefficient (ERC), established stocks returns have been divided into non- cash flow shock and cash flow shock. The results indicate that stocks with good (poor) accrual quality are subject to relatively lower (higher) non-cash flow shocks. Overall, this study underscoperes the importance of controlling for cash flow shocks in asset-pricing tess that use realized returns. One of the most important factors in selecting the best investment is stocks return. Considering the relationship between stock return and other accounting information, investors are able to allocate their own resources in the best manner. Accruals quality is one of the factors which affects on stocks return. For so doing, a sample of 79 firms listed in Tehran Stock Exchange has been investigated in 2001-2012 time interval. In the current research, using a simple method based on Earning Response Coefficient (ERC), established stocks returns have been divided into non- cash flow shock and cash flow shock. The results indicate that stocks with good (poor) accrual quality are subject to relatively lower (higher) non-cash flow shocks. Overall, this study underscoperes the importance of controlling for cash flow shocks in asset-pricing tess that use realized returns. https://acctgrev.ut.ac.ir/article_51723_3e4435fe335c722fdf686d431bb24765.pdf