Study of the relationship between major shareholders and earnings management of listed companies in Tehran Stock Exchange

Ramin Ghobadi, Nazanin Hosseini

Abstract


managers. The role of corporate governance is useful when managers are deviating from shareholders. The interest of shareholders and earning management is one of the deviation samples through total accruals. Major shareholders are as one of the external variables of corporate governance that they mostly own most important part of the company's shares. They have opportunities and the required ability to monitor managers and they can affect managers’ decisions by this way. Therefore, it is possible to reduce the occurrence of earnings management. Major investors may be improve the investors’ perceive of the corporate credibility performance which they will be assessed by the gain in terms of earnings management. The main objective of this study was to investigate the relationship between earnings management and major shareholders in listed companies in Tehran Stock Exchange. Data are collected using population consisted of 126 companies listed in Tehran Stock Exchange, which are came to55 companies by sampling, which all  data analyze by data integrating regression of ordinary squares methods during the period 2004-2009. Research includes a hypothesis that it was considered the relationship between percentages of major shareholders as independent variable and earning management as dependent variable. The results at 5% error level stated the hypothesis configuration and it showed that there is significant relationship between major shareholders and earning managements and this causes its reduction.


Keywords


Major shareholders, corporate governance, Earnings management, Total accruals.  

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