The Effect of Conservatism and Delay in Simultaneous News Disclosure of Interim Earnings and Annual Earnings Forecast on Stock Market Reaction

Document Type : Research Paper


1 Ph.D. Candidate in Accounting, Islamic Azad University, Khorasgan Branch, , Iran

2 Associate Prof., Department of Management, Faculty of Financial Management, University of Isfahan, Esfahan, Iran

3 Professor of Accounting & Financial Management., Ex member of Accounting Dept., Shahid Chamran University,Ahvaz, Iran (retired in 2010). At the moment I am director of Accounting PhD. students at the Islamic Azad University, Isfahan Branch.


In Iran companies listed in Security Exchange are required to present their interim earnings and annual earnings forecast within 30-days of the end of each quarterly and often these announcements are simultaneously Due to the simultaneous announcement that may be two different types of news or similar news from the announcement to Publish to market. Thus the purpose of this study is to survey the impact of the type and nature of news of simultaneous announcement of these earnings on stock market reaction. Also the investigating of the factors affecting the timing of news recognition for example delay in simultaneous announcement of these earnings, conservatism in interim earnings and conservatism in earning forecasts of management on stock market reaction  have founded other purposes of this research. In so doing, we have selected 101 listed-companies as our resulting research sample in period 2008-2014 using systematic sampling method as well as applying some restrictions and used models were multivariate regression models using panel data. From hypothesis testing, the resuls showed that there is no significant difference between the market reaction to the contemporaneous news of interim earnings and good and bad annual earnings forecasts at a certain level of interim earnings news and annual earnings forecast and delay  in simultaneous announcements of earnings increase (decrease) market reaction to good (bad) news. Results also showed in companies with more conservative in interim earnings and in earning forecasts of management decreases (increases) stock market reaction to good (bad) news.


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