Investigating Real Earnings Management Activities and its Impact on Stock Returns Prior to Share Issuance in Companies Listed on Tehran Stock Exchange

Much research has been conducted on earnings management based on accruals in the field of accounting but earnings management based on real activities and its effects have received less interest. Therefore, the purpose of this research was to investigate the real earnings management activities prior to share issuance and also their impact on the stock returns of companies admitted to the Tehran Stock Exchange. In this research, the relationship between the variables in the period of 2015-2020 was examined annually for 106 companies accepted in the Tehran Stock Exchange which were selected through the screening method (systematic elimination) and continuously active during the mentioned years. The hypothesis testing method used was the multivariate regression model in the composite data set. At the confidence level of 95%, the first hypothesis of the research (existence of real earnings management prior to share issuance in the companies accepted in the Tehran Stock Exchange) was not confirmed. The second main hypothesis (real earnings management has an effect on stock returns in companies listed on the Tehran Stock Exchange) was confirmed.