The relationship of accruals and assets growth with return and risk level of companies listed in Tehran Stock Exchange

This paper addressed finance and behavioral finance theories including capital assets pricing and arbitrage theory. In addition, the relationship of the growth of assets and accruals with the financial performance of the firms listed in the Tehran Stock exchange over 2008-2013 was explored. The results showed that the growth of assets and abnormal returns has a relatively strong relationship with abnormally fluctuated shares. It was also found that returns on accruals are more strongly influenced by the group with highly abnormal fluctuations than by group with low abnormal fluctuations. In addition, results are similar when the size is controlled. These findings suggest that the negative correlation found between accruals and abnormal returns are mostly attributable to shares that have unusually high fluctuations.

Keywords:

accruals , unsystematic risk , assets growth , risk and return