The study of relations between Transient/ Long term Institutional Investors and Effective Discretionary Accrual anagement and

Document Type : Original Article

Authors
1 Faculty of Economic and Accounting, central teharan Branch, Islamic Azad University
2 Department of Business Management, Qazvin Branch, Islamic Azad University (Corresponding Author)
Abstract
This study classifies institutional investors into transient and long-term based on their investment horizons to find evidence on the relationship between institutional investors’ type and effective earnings management practice by using performance-matched discretionary accrual measure (Kothari et al., 2005). The regression results on the association between institutional investors’ type and performance-matched discretionary accruals show that long-term institutional investors limit earnings management behaviors among firms that managed earnings effectively via discretionary accruals (PMDA+), while short-term institutional investors are negatively associated with performance-matched discretionary accruals among firms that did not manage earnings by using discretionary accruals (PMDA-).
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