TO STUDY THE EFFECT OF MANAGEMENT EARNINGS FORECASTS IN RISK AND VALUE OF THE FIRMS LISTED ON TEHRAN STOCK EXCHANGE

In the present, empirically, the identified factors in studies conducted outside the country, have been evaluated on Tehran Stock Exchange. The population under study includes 101 firms listed in Tehran Stock Exchange that the required information and data for a 6 year period of research (2007 – 2012) for them is available. This study from method and nature point of view of a correlation study and for testing research hypotheses correlation test and linear regression test have been used. Research hypotheses are based on the assessment of three factors including forecast accuracy, frequency of accuracy and forecast validity. With considering the reaction of risk and value of firms toward the announcement of earnings forecast by management as the dependent variable, the findings of the research indicate that there is a direct relationship between the validity of the announced earnings forecast by the management with the firm value. Also, the findings resulting from testing the 2 nd hypothesis indicate that there is a reverse relationship between the variable of credibility and the frequency of earnings forecast with unsystematic risk and a direct relationship between forecast errors with unsystematic risk. Regarding the effect of the variables of management earnings forecast on systematic risk no significant relationship was observed.