The study of relationship between earnings quality and investment in capital assets on Tehran stock exchange companies

Abstract

This study examines the relationship between earnings quality and investment in capital assets of accepted companies in Tehran Stock Exchange. For this purpose, 109 sample companies with required information for 4-year period (2007-2010) of study were selected in judgmental form and based on the defined limitations. The investigated variables of this study included the earnings quality, investment in capital assets and the returns on capital asset. The results of the data analysis and hypotheses testing indicated that there is a significant relationship between earnings quality and investment in capital assets in both retrospective approach and the prospective approach.