The role of earnings management and windfall profits in investor confidence: Evidence from industrial companies listed on the Tehran Stock Exchange.

Document Type : Original Article

Authors
Elham Fazeli Veisari 1
Reyhaneh Falahnezhad 2
1 Department of Management and accounting, To.c., Islamic Azad University, Tonekabon, Iran.
2 Accounting master, accounting department, Tonekabon branch, Islamic Azad University, Tonekabon, Iran
10.22034/jgdsm.2025.528023.1016
Abstract
Profit management is one of the important features of financial reports that affects the optimal allocation of resources; Because profit is considered one of the main inputs of investors' and analysts' evaluation models. The purpose of this research is to examine the role of profit management in gaining capital confidence in companies listed on the Tehran Stock Exchange. The statistical population of the research is the companies admitted to the Tehran Stock Exchange in the period of 9 years from 2012 to 2020, with the exception of investment and mediation companies; Based on this, the rest of the profitable companies in the stock exchange during the investigated time period constitute the statistical population of the research. The statistical sample is selected by systematic elimination. In order to test the hypotheses of the research, the multivariate regression method was used based on the combined data analysis method and the research model of Augster and Wagner (2020) was also used. The results indicate that the management of profit and unexpected profit in the industrial companies of Tehran Stock Exchange has a negative and positive effect on attracting investor's trust, respectively.
Keywords
Earnings management
unexpected profit
attracting investor's trust

  • Receive Date 11 February 2025
  • Revise Date 25 February 2025
  • Accept Date 05 March 2025
  • First Publish Date 20 March 2025
  • Publish Date 20 March 2025