the effect of quality of earnings on earnings response coefficients

so far, the financial experts could not calculate independent earnings to have a necessary quality. in this case, they can reach a range of earnings, which show a more correct form of quality of earnings, of course with performing the suitable equitabilities. therefore, the concept of quality of earnings is not a fixed defining. however, it is a relative concept that depends to its relation to points of view and attitudes. in this research quality of earnings is based a set of fundamental financial variables which has been discerned useful by financial analysts in the security evaluation. they believe that these financial variables would be used by investors in the evaluation of quality of earnings. the earnings response coefficient measure unexpected return of the market in response to the unexpected components of the reported earnings by the company that has distributed the securities. in other word, earnings response coefficient is the sensitivity of market in account to declaration of earnings. the purpose of this research is to study the effect of quality of earnings on earnings response coefficient. the results show that earnings response coefficient do not have meaningful differences in the companies that have different earnings quality (high, medium and low quality). in other words, investors in tehran stock exchange do not consider the quality of earnings of companies at the time of response to the earnings changes.