Determining the position of market power on discretionary accruals Policies by Using of Raman and Shahrur Model

In this study, we examined the relationship between product market power and competitiveness of the industry and current accruals by using of Raman and Shahrur model. The purpose of this study was to evaluate the strength of the product market and industry competitiveness and sustainability of earnings in companies listed on the Tehran Stock Exchange. To achieve this goal, the Herfindahl-Hirschman Index, Lerner and Adjusted Lerner index as a measure of competitiveness were considered. Our sample consists of 97 firms for the period 2005–2011. The results of hypothesis testing method combined data suggest that the Herfindahl -Hirschman index as an indicator of the level of competition in the industry, there is a negative relationship between the sustainability of corporate earnings. But this relationship is not significant. In addition, the Lerner index and the Lerner index adjusted earnings sustainability, there is a significant negative relationship. This finding means that no matter how competitive the industry is, the greater the benefit will be more stable.