اسفندیار ملکیان

This study focuses on the idea that an increase in poor matching amongst Iranian firms over the last five year s had a decreasing impact on the contemporaneous correlation between revenues and expenses. From the theory of perfect matching a model was created by Dichev and Tang (2008) to depict the effects of poor matching. The model indicates that poor matching acts as noise in the economic relation of advancing expenses to earn revenues. In order to test research hypothesis 96 firms selected among firms listed in Tehran Security Exchange. Research results shows that increase in poor matching leads to decrease in correlation between incomes and costs that with regard to decrease in income and costs correlation, poor matching cause decrease in earning persistence and increase in volatility. Finally the model also gives rise to the idea that for longer-horizon definitions of earnings, the effects of poor matching will be less pronounced.