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The Study of Relationship between Intellectual Capital and its Growth Rate with Earning Management: In Accepted Companies in Tehran Stock Exchange

International Journal of Management Prudence

Volume 6 Issue 2

Published: 2014
Author(s) Name: Hamid Saremi, Tayebeh Mohammadi, Faezeh Firooz | Author(s) Affiliation: Master of Financial Management, Islamic Azad University, Neyshabur Branch, Iran
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Abstract

Since the intellectual capital provide a new and perfect model to observation of organizations real value, therefore, the tendency to evaluation of intangible assets true value of intellectual capital has increased in companies, shareholders (investors) and other stakeholders. This study investigates the relationship between the intellectual capital and its growth rate with earning management in accepted companies in the Tehran Stock Exchange. The statistical society of study includes all Tehran Stock Exchange firms after put of certain conditions sampling was undertaken. Finally, during the period 2006 to 2013, 121 companies selected. The methodology of research is descriptive. Using a modified Jones discretionary accruals calculated as a measure to detect earnings management and then placed in the regression model defined earnings management, Hypotheses were tested. With the use of regression analysis the research hypotheses have been carried out. Also a number of control variables consist of Size and M/B have been used. The results of this study show that there is a significant relationship between intellectual capital and earnings management but there is a significant relationship between intellectual capital growth and earnings management.

Keywords: Intellectual Capital, Intellectual Capital Growth, Earning Management

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