International Journal of Finance & Managerial Accounting

International Journal of Finance & Managerial Accounting

The Effect of Oil Price, Oil Price Shocks and Oil Sales Shocks on Earnings Management in Downstream Oil Industries Exchange Companies

Document Type : Original Article

Authors
Leila Zamanianfar 1
shahrzad seraj 2
Mohsen Arab Yarmohamadi 1
Yekta Pakniyat 3
1 Department of Accounting, Shahrood Branch, Islamic Azad University, Shahrood, Iran
2 Department of Accounting, South Tehran Branch, Islamic Azad University, Tehran, Iran.
3 M.A. in Finance and Banking, Allameh Tabatabaei University, Tehran, Iran
10.30495/ijfma.2023.73078.2011
Abstract
This study has used the dynamic self-regression vector panel method to investigate the effect of oil prices, oil price shocks and oil sales shocks on accrual earnings management in downstream oil industry stock exchange companies during the years 2014 to 2022. For this purpose, 37 companies were surveyed. First, using the Garch method, fluctuations in oil price and oil sales variables were extracted. Then, the relationship between the variables was determined using a dynamic panel. Finally, based on the vector self-regression panel, the shock of the impact of each of the effective variables on accrual earnings management was investigated. Based on the results of the Garch method, oil prices and oil sales had an Arch effect. Therefore, using this model, the conditional variance of each series was extracted under the heading of fluctuation. Then, based on the dynamic panel method, it was found that oil price has a negative effect on accrued earnings management and oil price shock and oil sales momentum have a positive effect on accrued earnings management. Finally, this result was obtained based on vector auto-regression method, if the variables of oil price, oil price shock and oil sales shock increase by a standard deviation, the accrual earnings management variable will show negative, positive and positive reactions, respectively. Also, according to the results, oil prices have the highest explanation for changes in accrual earnings management.
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