Explaining the Relationship Between Sticky of Expenses with Prediction Error of Profit in Tehran Stock Exchange

Abstract

One of the basic assumptions of management accounting illustrate that costs<br />changes has a significance Relationship with increasing and decreasing in the level<br />of activity, recently after being raised of sticky costs issue by Anderson and his<br />colleagues this assumption was discussed. It means Increases in costs by increasing<br />the more activity level of reduction in costs is exchange for the reduction in the<br />level of activity. Anderson et al (2003) changed the expression of Cost behavior to<br />sticky costs. The Subject profit forecast error is one of the issues that can affect<br />investment decisions to hold or transfer of shares, because purchase of shares of<br />the new company's stock is riskier process than other companies; Because of its<br />lack of trading Background, historical information related to their is low. Accordingly,<br />in prediction two fundamental goals follow: The first one obviously is the<br />proper planning and second one is Familiarity and deployment of predictive techniques<br />using predictive techniques for decision making and problem solving process.<br />The aim of this study was to investigate the relationship between forecast<br />error of earnings and sticky cost in Tehran Stock Exchange. To achieve this aim, a<br />main hypothesis and sub-hypothesis has been proposed, and to test hypotheses<br />data 108 firms listed companies in Tehran Stock Exchange using systematic sampling<br />purposefully selected, and data of the period between 2007 to 2013 was used<br />for statistical analysis. Finally, the results indicate that There is an inverse relationship<br />between sticky costs and forecast error of earnings, and also between<br />sticky cost of goods sold and sticky costs of sales.