The "opportunistic behavior” hypothesis posits that listed companies have lower earnings due to management intervention in the earnings process as a result of capital market pressure as well as their own interest. We identify three attributes associated with the notion of earnings quality including persistence and estimation error of accruals and prevalence of earnings management. We compare earning quality of 40 companies before and after being listed in TSE during 1381-1387(2003-2009). This paper illustrates the effects of public ownership on earning quality. We test the three hypotheses using regression, paired sample T test and wilcoxon techniques .The results show that persistence of accruals are decreased after listing the companies, but estimation error of accruals and prevalence of earnings management have no significant difference. The results are consistent with the “opportunistic behavior” hypothesis.
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