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Relationship between Operating Cycle and Quality of Accounting Information in Tehran Stock Exchange Listed Companies

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  • Bahman Banimahd
  • Sara Boustani
  • Mohsen Hamidian

Abstract

Earnings quality in financial reporting can influence confidence of investors in financial markets. Since the information and financial reporting environment of organizations is affected by the activity type of a business unit, quality of financial reporting is somehow influenced by these specifications and different activity types of organizations. So, this research aimed to study the relationship between operating cycle and quality of accounting information. The statistical population included the companies listed on Tehran Stock Exchange from 2008 to 2012, among which 110 companies were randomly selected based on Cochran's sample size formula. The research results showed no significant relationship between operating cycle and accruals quality. Also, it was found that increase in operating cycle would result in reduced earnings quality.

Suggested Citation

  • Bahman Banimahd & Sara Boustani & Mohsen Hamidian, 2014. "Relationship between Operating Cycle and Quality of Accounting Information in Tehran Stock Exchange Listed Companies," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 4(4), pages 326-332, October.
    • Handle: RePEc:hur:ijaraf:v:4:y:2014:i:4:p:326-332
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    References listed on IDEAS

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    1. Dechow, Patricia M., 1994. "Accounting earnings and cash flows as measures of firm performance : The role of accounting accruals," Journal of Accounting and Economics, Elsevier, vol. 18(1), pages 3-42, July.
    2. Jennifer Francis & Michael Smith, 2005. "A Reexamination of the Persistence of Accruals and Cash Flows," Journal of Accounting Research, Wiley Blackwell, vol. 43(3), pages 413-451, June.
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    1. Dr. Ologhodo Johnbest Churchill & Dr. Ugbaje David Ojofedo & Dr. Nnamdi Chukwuto O, 2024. "Earnings and Ownership Characteristics on Reported Earnings Quality of Listed Industrial Goods Companies in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(7), pages 339-357, July.

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