This study investigated the effect of income smoothing on information uncertainty, stock return and cost of equity. For income smoothing two indices are used: total accruals smoothing and discretionary accruals smoothing. With accurate study of literature we hypothesized three possibilities and selected 111 companies listed in Tehran stock exchange as our survey for a period of three years, 1385-1387.
In this study, Ohlson and Juttner- Narouth models were used to collect data. Our hypotheses were analyzed using multiple liner regressions and F and T tests. Our results showed that income smoothing caused reduction in information uncertainty in selected companies. It also showed that when fluctuations related to unexpected stock earnings are controlled, income smoothing 5 days before and after earnings announcement has no effect on companies' stock return. Finally our data showed that income smoothing has no effect on cost of equity.
Soleimany Amiri, G., & Hamzi, R. (2011). The effect of Income smoothing on firm's information uncertainty, stock returns and cost of equity. Accounting and Auditing Review, 18(64), 91-112.
MLA
Gholamreza Soleimany Amiri; Razieh Hamzi. "The effect of Income smoothing on firm's information uncertainty, stock returns and cost of equity", Accounting and Auditing Review, 18, 64, 2011, 91-112.
HARVARD
Soleimany Amiri, G., Hamzi, R. (2011). 'The effect of Income smoothing on firm's information uncertainty, stock returns and cost of equity', Accounting and Auditing Review, 18(64), pp. 91-112.
VANCOUVER
Soleimany Amiri, G., Hamzi, R. The effect of Income smoothing on firm's information uncertainty, stock returns and cost of equity. Accounting and Auditing Review, 2011; 18(64): 91-112.
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