Univrsity Of Tehran Press Accounting and Auditing Review 2645-8020 22 2 2015 08 23 Investigating asymmetric ratcheting effect on budgeted earnings in Tehran Stock Exchange Investigating asymmetric ratcheting effect on budgeted earnings in Tehran Stock Exchange 143 160 54967 10.22059/acctgrev.2015.54967 FA Ali Asghar Anvary Rostamy Prof., Accounting University of Tarbiyat Modares, Iran 0000-0002-7495-8276 Zohreh Mohammadi Shad Ph.D. Student, Accounting University of Tarbiyat Modares, Iran Ahmadreza Maroufi Ph.D. Student, Accounting University of Tarbiyat Modares, Iran Journal Article 2014 11 04 Asymmetric ratcheting effect occurs when an unfavorable (favorable) budget variance causes in increase (decrease) in next period’s budget. The current study aims to investigate the existence of this effect on budgeted earning in Tehran stock exchange. We assume that the forecasted earning, which the firms listed in TSE are obligated to disclose, is the reflection of internal budget of the firm and the determined performance. By this disclosure, firms give their controlling instrument to capital market. Statistical sample includes 325 firms listed on TSE during 1386 to 1392. The results reveal that deviation from budgeted earning has a significant effect on the next period’s budget and unfavorable deviation effect is more than the favorable one.   Asymmetric ratcheting effect occurs when an unfavorable (favorable) budget variance causes in increase (decrease) in next period’s budget. The current study aims to investigate the existence of this effect on budgeted earning in Tehran stock exchange. We assume that the forecasted earning, which the firms listed in TSE are obligated to disclose, is the reflection of internal budget of the firm and the determined performance. By this disclosure, firms give their controlling instrument to capital market. Statistical sample includes 325 firms listed on TSE during 1386 to 1392. The results reveal that deviation from budgeted earning has a significant effect on the next period’s budget and unfavorable deviation effect is more than the favorable one.   https://acctgrev.ut.ac.ir/article_54967_0e48f3c376310b267eafa8afc0c25fcd.pdf