Modeling and Identifying Hierarchy of the Effective Measures of the Earning Management on the Prediction of the Bankruptcy

Namazi, Mohammad; Hajiha, Zohre; Chenaribokat, Hasan

doi:10.22051/jfm.2018.13604.1257

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	Modeling and Identifying Hierarchy of the Effective Measures of the Earning Management on the Prediction of the Bankruptcy
راهبرد مدیریت مالی
Article 1, Volume 6, Issue 4 - Serial Number 23, January 2018, Pages 1-27 PDF (1019.74 K)
Document Type: Research Paper
DOI: 10.22051/jfm.2018.13604.1257
Authors
Mohammad Namazi¹; Zohre Hajiha²; Hasan Chenaribokat^* ²
¹Shiraz University
²Islamic Azad University, Tehran Branch of the East
Abstract
The main aim of this study is modeling and determining hierarchy of the criteria of real earning management on the prediction of the bankruptcy of the companies listed in Tehran Stock Exchange. The required data was collected from financial statements of 81 companies, during 1386-1396. In this study real earnings management model developed by Dechow et al. (1998) similar to those in Roychowdhury (2006), and the risk of a bankruptcy Altman's criteria (1983) were used. The analysis was attempted via multivariate regression of pooled data algorithm. The results showed the relationship among the flow of abnormal operating cash costs, discretionary abnormal production costs, discretionary abnormal costs and probability of bankruptcy occurrence had positive significant, negative significant and non-significant effect, respectively. In addition, increasing (decreasing) of flow of abnormal operating cash costs resulted in increasing (decreasing) probability of the bankruptcy occurrence. Increasing (decreasing) of discretionary abnormal production costs led to decreasing (increasing) probability of the bankruptcy occurrence
Keywords
Abnormal Operating Cash Flow; Abnormal Production Costs; Bankruptcy; Real Earning Management

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Modeling and Identifying Hierarchy of the Effective Measures of the Earning Management on the Prediction of the Bankruptcy