ACCOUNTING CONSERVATISM AND CASH HOLDING IN ASSOCIATION WITH STOCK RETURNS
DOI:
https://doi.org/10.32461/2226-3209.1.2018.177567Abstract
Abstract. The present research investigates the relationship between accounting conservatism and cash
holdings on the one hand and the stock returns of companies listed in Tehran Stock Exchange. It is applied research and methodologically of causal (post-event) type; its statistical population is all companies accepted in Tehran Stock Exchange. Using a systematic elimination sampling method, finally 104 companies were selected as research sample and its period was between 2012 and 2016. The method used to collect information was library and to test the hypotheses the multiple regression with panel data model was used. The results of the research show that there is a positive and significant relationship between accounting conservatism and stock returns, but there is a negative and significant relationship between stock holding and stock returns.
Key words: accounting conservatism, cash holding, stock returns
References
Ahmadpour, A. & Rahmani Firoozjaee, M. 2007, "Investigating the effect of company size and the ratio of
book value to market value on stock returns", Journal of Economic Research, No. 79, pp. 19-37.
Eslami Bigdeli, Gh. et al., 2005, "Analysis of Investment and Management of the Portfolio of Securities",
Second Edition, Publications of the Institute of Economic Affairs, pages 5-244.
Amiri, A. & Nemati, K. & Dordaneh, E. (2017), Effect of the Outcome of the Cash Components of Profit and
Continuity of Profit on Stock Returns of the Companies Accepted in Tehran Stock Exchange. Research-scientific
Quarterly of Management, Accounting and Economics, Volume 1, Issue 2, p. 24-08.
Babaei Sadaghiani, J. & Jabarzadeh Sangarloui, S. (2017), Effect of the level of cash holding and debt
financing on the sensitivity of investment to cash flow with an emphasis on financial constraints. New Researches in
Accounting and Auditing, Article 8, Volume 1, Issue 2, P. 156-189.
Khani, A. & Sadeghi, M. & Mohammadi Hawlesoo, M. (2014), Effect of Research and Development Costs on
Stock Returns of Active Pharmaceutical Companies in the Tehran Stock Exchange ", Research-scientific Quarterly of
Financial Accounting, Vol. 6, No. 21, pp. 174- 153
Fakhari, H. & Roohi, Gh. (2013), Investigating the effect of retained cash and management of working capital
on stock returns of companies. Accounting Knowledge, Volume 4, Issue 14; p. 27-49.
Gholipour, I. & Fatahi, S. (2013), A study on earnings conservatism on stock returns and book value of shares
of financially helpless companies accepted in Tehran Stock Exchange. Audit Knowledge, Year 14, No. 56, pp. 143-
Gougerdchian, A. & Heydari Sultan Abadi, H. & Motafares, Z. (2013), Theoretical and Empirical Analysis of
the Effect of Product Market Competitive Power on Stock Returns of Companies accepted in Tehran Stock Exchange.
Asset Management and Financing, Article 4, Volume 5, Issue 1, Serial No. 16, Page 31-44.
Basu, S. ,(1997)," The conservatism principle and the asymmetric timeliness of earnings", Journal of
Accounting and Economics, 24, pp. 337
Guay, W. and Verrecchia, R.E. ,(2007),” Conservative disclosure". Working paper, University of
Pennsylvania.
Hendriksen, E. S. ,(1982), "Accounting Theory, 4th ed., Homewood:" Irwin Watts, R.L., ,(2003), b,
Conservatism in accounting Part II.
Papanastasopoulos, G. (2015). Accruals, growth, accounting distortions and stock returns: the case of FRS3
in the UK, The North American Journal of Economics and Finance, Vol. 33, Pp.39-54.
Sun, L. (2015). Relationship between Inflation News and High Frequency Stock Returns.
Watts, R.L.,) 2003b(, "Conservatism in accounting Part II".
Downloads
Issue
Section
License
Authors who publish with this journal agree to the following terms:
1. Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
