Accounting and Auditing Review

Accounting and Auditing Review

The Relationship between Institutional Stock Ownership and Earnings Management in Listed Companies on Tehran Stock Exchange

Authors
Mahdi Moradzadehfard
Mahdi Nazemi Ardakani
Reza Gholami
Hojatollah Farzani
Abstract
This study investigate the effect of institutional stock ownership on a firm’s earnings management activity by testing the empirical association between institutional Investor shareholdings and flexibility available for managers to make use of abnormal Accrual adjustments to manage earnings. This study is motivated by the fact that most previous earnings management research generally ignores the influence of corporate governance factors that might constrain managers’ ability to manage earnings. Institutional investors improve the quality of corporate governance in financial reporting. The statistical population of this research consists of listed companies on Tehran Stock Exchange (TSE).It is Used 2 different types of statistical test (Correlation and multi cross-sectional regression tests) for investigating the relationship between earnings management and institutional stock ownership. The results show a significant difference between stock institutional ownership level and its concentration with earnings management.
Keywords
Corporate governance
Earnings management
Institutional Ownership
Institutional Ownership Concentration