RESIDUAL INCOME OR ECONOMIC VALUE ADDED,WHICH ONE IS MORE CLOSE TO EARNINGS QUALITY

In this study, the relationship between economic value added & residual and income, with earnings quality of the companies listed in Tehran Stock Exchange has reviewed. To achieve this goal, this study tested 2 hypotheses and chose 78 companies among the companies listed in Tehran Stock Exchange for the period of 6 years (2005 to 2010). Pearson correlation, coefficient of determination and linear regression model was used for statistical analysis of data and test research hypotheses. The results of the statistical analysis of research hypotheses represent a significant relationship between residual income and economic value added, with earnings quality.

Earnings quality, residual Income, economic value added, weighted average cost of capital