Examining the impact of accounting information--based downside risk on future stock price crash risk

Mohamadi, Reyhane; Saeedi, Rahman; Dastgir, Mohsen

doi:10.22075/ijnaa.2026.40183.5608

Examining the impact of accounting information--based downside risk on future stock price crash risk

Articles in Press

Document Type : Research Paper

Authors

Reyhane Mohamadi

Rahman Saeedi

Mohsen Dastgir

Department of Accounting, Isf, Islamic Azad University, Esfahan, Iran

10.22075/ijnaa.2026.40183.5608

Abstract

Investors tend to be more reluctant to purchase stocks that have historically experienced sharp price declines. Consequently, firms must understand the determinants of stock price crash risk in order to prevent crash events when making investment decisions, managing risks, and protecting shareholder wealth. One of the key factors influencing future stock price crash risk is accounting information-based downside risk, which is measured through earnings-based downside risk, accruals-based downside risk, and operating cash flow-based downside risk. Accordingly, this study investigates the effect of accounting information--based downside risk on future stock price crash risk. The statistical population of the study consists of firms listed on the Tehran Stock Exchange, and the sample includes data from 105 firms over 11 years from 2014 to 2024. A systematic elimination sampling method was employed. The research model was estimated using multivariate regression analysis based on panel data. The findings indicate that earnings-based downside risk, accruals-based downside risk, and operating cash flow-based downside risk, as measures of accounting information-based downside risk, have a statistically significant effect on future stock price crash risk.

Keywords

Earnings-based downside risk

Accruals-based downside risk

Operating cash flow–based downside risk

Future stock price crash risk

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