1.
Saeid Jabbarzadeh Kangarlouei
– Islamic Azad University, Iran
2.
Houryeh Alizadeh Arabloue Bishe
– Islamic Azad University, Iran
3.
Morteza Motavassel
– Islamic Azad University, Iran
Abstract
This paper examines the relationship between Prior
Period Adjustment (PPA) and Earnings Management
(EM) in Tehran Stock Exchange (TSE). In other words,
this study seeks to answer the question as to whether
restatement causes the EM or not. For this purpose, a
sample of 81 companies was selected and examined
during the period of 2002 to 2010 in six industry using
panel data with fixed effect model. Modified Jones
model (1991) is used for measuring of EM. To test
hypotheses, multiple regression models and Pearson
correlation coefficients are used. Results indicate that
there is no significant relationship between PPA and
EM in TSE.
