The present study empirically examines a modified Basu model at the Tehran Stock Exchange. It plans to use three financial variables (size, market to book value of common stock and leverage ratios) to estimate the information asymmetry inherent in the companies' financial reports. Statistical tests at three levels were studied. The results demonstrate the utility of modified Basu model to measure the asymmetry of the profit. Furthermore, the results showed that the explanatory power of the model than the original model has been developed. In addition, results from this study suggest that the impact of good news than bad news on firm performance is faster. The results are inverse for level of debt in capital structure. The study showed that the ratio of market value to book value stocks has the same behavior like leverage ratio.
Setayesh, M. H. (2013). Modified Basu model for estimated conservatism. Accounting and Auditing Research, 5(17), 52-67. doi: 10.22034/iaar.2013.104553
MLA
Mohammad Hossein Setayesh. "Modified Basu model for estimated conservatism". Accounting and Auditing Research, 5, 17, 2013, 52-67. doi: 10.22034/iaar.2013.104553
HARVARD
Setayesh, M. H. (2013). 'Modified Basu model for estimated conservatism', Accounting and Auditing Research, 5(17), pp. 52-67. doi: 10.22034/iaar.2013.104553
VANCOUVER
Setayesh, M. H. Modified Basu model for estimated conservatism. Accounting and Auditing Research, 2013; 5(17): 52-67. doi: 10.22034/iaar.2013.104553
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