The Role of the Accrual Management in the Stock Liquidity: Evidence from IRAN

Document Type : Original Article


1 Assistant Professor, Karaj Islamic Azad University, Iran

2 M.A Student of Accounting, School of Economic Sciences, Tehran, Iran


Regarding the increasing importance of liquidity, getting knowledge about the factors which can have effects on it, can be helpful to make it improved. This study offers evidences about the role of the accrual management in the stock liquidity. In this research, we adopted the modified Jones model to measure accrual management. We investigated the influence of accrual management on five liquidity measures, after observing the effects of control variables. Considering sampling limitations, we tested 75 corporations, from 1383 to 1387 (355 observations). We utilized cross-sectional multivariable regression to test our research hypotheses. The results indicate that accrual management has a significant negative effect on stock liquidity. Higher earning management causes higher information asymmetry and transaction costs, so the willingness of uninformed traders decreases and the stock liquidity falls.


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