The Investigation of Effects of Risk in Earnings Components (accruals and cash flows) on Stock Price Crash Risk in Tehran Stock Exchange Firms

Document Type : Original Article

Authors
Zohre Hajiha 1
Mohammad Farrokhi 2
1 Assistant Professor of Accounting Department at Islamic Azad University- East Tehran Branch
2 Master of Accounting at Islamic Azad University- Tehran Science& Research Branch
Abstract
One of the original assumptions of agency theory is that company managers and shareholders have conflict in interests and managers don’t decide at benefit the shareholders. On this base this case resulting to make a financial reporting distransparent environment for investors that they become disable to discover and recognize loss projects of company and create a risk of Stock price crashes. So this paper studies the Earnings Components risk (cash flow and accruals) on Stock Price Crash Risk. In this research 124 companies accepted in Tehran Stock Exchange during 1387-1391 are studying. For testing the hypotheses we used from model of logistic regression. The results of this research shown that risk of total Earnings and its components, operation cash flow risk and accruals have a direct effect on  risk of Stock price crashes and increase it.
Keywords
Total Earnings Risk
Risk of Cash Flows
Accruals risk
Risk of Stock price crashes