The Relationship of Management Optimism and Earnings Smoothing by Discretionary Accruals between Banks Listed in Tehran Stock Exchange and OTC

Decisions power and authority in public companies available for managers that have an individual interest conflict with the interest of external groups, particularly shareholders. For affecting market prices in limitation of generally accepted accounting principles, managers use policies and methods that reduce fluctuation of reported earnings.
Direct and indirect evidences show that the real and anticipated earnings of per share have an important effect on stock’s market price. The purpose of this study was to investigate the relationship of management optimism and earnings smoothing between banks listed in Tehran stock exchange and OTC during 2010 to 2014. Adjusted community consists of 65 year-banks. To answer the research question one hypotheses through binary logistic regression in form of multivariate liner by using panel data (pooled) was tested. The results show that the optimism managers in compare with others, more likely to report earnings smoothed by Discretionary accruals. The results also indicate that, larger and older banks are more likely to report earnings smoothed by Discretionary accruals.