Presenting high quality and desirable services and management’s forecasts not only can show an appropriate image of the correctness of management’s claims, but also can affect the identification of investment risks in the company. Earning is one of the important and the main item in financial statements that absorbs the attention of users of financial statements. The present research is going to investigate about the relationship between forecasted earning quality and investment decisions. In this research 83 firms enlisted in Tehran Stock Exchange during the years between 2006 and 2013 have been studied. We have used a logistic regression model of investment efficiency to measure forecast precision and control variables. The research is correlation type and post-incidental and hypotheses’ test would be correlation and regression type. To test the hypotheses we have used Eviews7 software. The present research findings showed that the quality of forecasted earnings affect investment decisions positively and meaningfully. Thus, it can be stated that in firms enlisted in Tehran Stock Exchange the quality of forecasted earning has a meaningful relationship with investment decisions of firms’ managers.
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