Financial Accounting
Fatemeh Jalali Gorgani; Mohammadreza Abdoli; Hasan Valiyan; Mehdi Safari gerayli; Mohammad Mehdi Hossini
Abstract
The purpose of this study is evaluation matrix of perspective on the driving forces of legacy accounting. In this study, in terms of the methodological goal, this study is exploratory and from the perspective of the result, it is placed in the category of applied research. The participants in the qualitative ...
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The purpose of this study is evaluation matrix of perspective on the driving forces of legacy accounting. In this study, in terms of the methodological goal, this study is exploratory and from the perspective of the result, it is placed in the category of applied research. The participants in the qualitative part include 12 academic experts and accounting professors who have professional experience in the field of accounting and financial reporting, and in the quantitative part 22 people from managers and board members of companies with the nature of family ownership in this study as a pairwise comparison they participated. The result of this study in the qualitative part indicated the existence of 3 categories, 8 components and 39 themes as drivers of legacy accounting in family ownership, which was confirmed based on Delphi analysis. Then, by choosing 2 factors out of 8 identified components as the basis of scenario creation, 10 themes identified as sub-factors of scenario creation were examined. The result of the acquisition in a quantitative part indicates the existence of 4 scenarios with a favorable situation, which shows that the scenario of the second quarter with the metaphorical title of "Governance Hegemony" was determined to be the most effective driver in the emergence of legacy accounting in family-owned companies. IntroductionFamily-owned companies always face the assumption of opportunism at the level of the capital market from the point of view of market theorists and analysts, the reason for which is the large number of board members affiliated with the company owner or holding management positions in the decision-making structure of this type of companies (Sun et al., 2023). Assuming the acceptance of such an approach, it can be concluded that the method of financial functions and information disclosure is also done with the aim of covering the priorities of those in power in such a structure. Under such conditions, the violation of the rights of the beneficiaries can be considered the most important consequence of investing in these companies (Rezayee Pitenoei et al., 2021). Legacy accounting, as a term in such a structure with family ownership, can be considered a kind of practice in the shadow or parallel to the main accounting method of companies, which is used by the management of these companies to satisfy their opportunistic needs (De Wolf et al., 2020). In fact, legacy accounting is considered to be the result of a method of information disclosure that systematically prioritizes the interests of those in power over the interests of other shareholders. This is done in order to stimulate new investors to invest in the company's shares on the one hand and maintain the loyalty of current shareholders on the other. Additionally, it is used to secure their interests by providing cash for the development of investment plans and projects (Lloyd et al., 1999). Literature ReviewLegacy accounting aims to secure the interests of the majority of family owners by increasing the cost of minority shareholders, both in terms of money and share value (Wild, 2015). In fact, the interests of the majority of the shares, by increasing the members of family ownership through opportunistic accounting procedures, can deepen the conflict of interest between the internal owners (family owners) who control the company and external shareholders. This conflict of interest in legacy accounting procedures manifests in various ways, such as selling the company's products at a lower price to related people, hiring unqualified family members in the company, increasing the salary and benefits of family members, or showing an increase in tax payment. For example, companies often seek to minimize taxes, but some studies based on the accounting practices of family-owned companies show increased tax payments (Xia et al., 2017), as these companies aim to fulfill their financial obligations and seek to enhance their reputation by promoting social responsibility. MethodologyWhen designing the model, it is crucial to consider the execution method, ensuring that the phenomenon under investigation lacks an integrated framework and coordination within the target society, at least in terms of content. Therefore, given the lack of necessary theoretical coherence of the concept of legacy accounting within family-owned companies, as discussed in the theoretical foundations and introduction, this research is categorized as developmental research in terms of the result. The research approach of the current study, in terms of data collection logic, is of a hybrid type. This is because it explores a phenomenon for which there is no comprehensive framework in the theoretical areas of legacy accounting at the level of capital market functions, or where consensus is lacking. Therefore, the analysis of the qualitative part and the reliance on the data theory method are used to present the dimensions of the legacy accounting model as a multidimensional model.For this purpose, Glaser's (1992) emergent approach is used to develop the legacy accounting model through three stages of coding by using interviews with experts. In this approach, the theory emerges from the data, and researchers do not have presuppositions regarding the relationship between the data from the beginning. Additionally, based on the emergent foundation data theorizing strategy, data analysis begins simultaneously with the interviews (Kolayeanmoghadam et al., 2020). In terms of the purpose, this research fallswithin the category of exploratory studies conducted using both quantitative and qualitative models. The present study employs various research methods to address the formulated questions, tailoring each method to the specific needs of the respective department. Therefore, based on the nature of collection, this study can be classified as mixed research. Thus, different methods are employed for data collection and analysis at each stage of this study's analytical processes. ResultThis research, by undertaking through three main steps in the theoretical analysis of foundational data including open coding, selective coding, and core coding, seeks to explore the concept of heritage accounting development based on a theoretical framework. Through 12 interviews conducted across three stages of open coding, central coding, and selective coding, a total of three categories, eight components, and 39 conceptual themes were identified. These dimensions were determined after Delphi analysis to ensure reliability. Next, aiming to formulate future scenarios for evaluating the driving forces behind the development of legacy accounting in family ownership, the most effective axes for this evaluation were determined using the Micmac matrix by identifying the inputs and outputs of the matrix model. As a result, this section confirmed governance opportunism and behavioral opportunism as the primary driving factors influencing legacy accounting in family-owned companies. Subsequently, through the reciprocal matrix, scenarios describing the driving forces in the emergence of this accounting practice were determined. ConclusionThe term hegemony means the dominance of a group of power holders over others. The extension of this concept to the mechanism of governance refers to the fact that a powerful person as an owner, in an effort to protect their interests, tries to make arbitrary appointments based on the level of loyalty to the person in power. Decisions should be made solely to achieve the goals and visions set by the powerful person. In this governance structure, while the size of the board of directors may adhere to rules and requirements, the absence of conflict of interest and diversity of views within the board compromises its ability to effectively monitor the company's operations, leading to decisions primarily aligned with the owner's objectives. In such structures, the board of directors often lacks the necessary independence to make decisions contrary to the opinions of those in power. Instead, they merely symbolically apply external supervision to maintain market stability. In general, the scenario of hegemonic governance shows the promotion of the dominant values and culture of the power holders in a company, which is a model of the pervasive dominance of their ideas and opinions over the entire company. Additionally, this result indicates that legacy accounting within such a regulatory process serves as an instrumental approach, a lever to advance governance goals in family companies. By selectively disclosing news and information to stakeholders, it seeks to protect the interests of these individuals or the so-called powerful person
Accounting and various aspects of finance
Shahla Talari; Fatah Behzadian; Mehdi Safari gerayli; Rahman Saedi
Abstract
Changing the nature of behavioral knowledge in the auditing profession from purely classical processes in the development of auditors' functions to philosophical and cognitive processes has increased the quality of work life in this field. The purpose of this study is to present a model of auditors' ...
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Changing the nature of behavioral knowledge in the auditing profession from purely classical processes in the development of auditors' functions to philosophical and cognitive processes has increased the quality of work life in this field. The purpose of this study is to present a model of auditors' psychological well-being and evaluate identified themes in the auditing profession. This study employs an exploratory methodology with analytical elements. Because of the lack of an integrated framework regarding the recognition of auditors' psychological well-being dimensions, we identified the study's themes through 12 interviews and coded them using thematic analysis. Then, using two processes of fuzzy Delphi analysis and classic Delphi, we analyzed the reliability of the organizing and basic themes. In the quantitative part, to explain the themes confirmed from the Delphi analysis stage in the audit professional functions, we applied the fuzzy network analysis. In this study, according to the theoretical saturation point in thematic analysis, 12 accounting experts participated, and in the quantitative part, 30 auditors with more than five years of experience in the auditing profession who had work experience and technical knowledge participated. The results of the study in the qualitative part indicate the existence of three overarching themes, six organizing themes, and 38 basic themes. Also, based on the result of the Delphi analysis, it was determined that from the total of 38 basic themes, 17 final themes were entered into the fuzzy network analysis in the form of six organizing themes, and the findings showed that the most effective organizing theme of psychological well-being in the context of professional auditing functions is the theme of perception stimulation of auditors. Findings also revealed that strengthening the internal locus of control is the most effective aspect of psychological well-being in auditing. 1- IntroductionExpanding behavioral sciences' influence on auditing in recent decades has transformed auditors' traditional approaches and professional roles, enhancing the quality of auditing reports. This is due to the interplay between professional judgment and auditing standards within the auditors' behavioral and cognitive domains. (Zhao et al,2023). A significant development in auditing knowledge is the concept of psychological well-being. Psychological well-being encompasses auditors' emotional and mental states, their overall life and career satisfaction, as well as their mental efficiency and functionality (Broberg et.al, 2020). According to Chen et al. (2022), well-being is closely tied to an individual's perception of their experiences, leading to higher mental satisfaction and more qualified roles in professional responsibilities. In essence, psychological well-being results in positive emotions, a sense of purpose, autonomy, and the ability to form meaningful relationships with others (Mahmoudi and Sajadi Nejad, 2022). Literature ReviewWhen investigating the findings of a study in the field of Disease Psychology, a group of psychologists, guided by Seligman et al. (1999), concluded that despite significant achievements in developing effective therapies, focusing on the causes of diseases, especially mental ones, can lead to a reduction in fatal diseases in society. They aimed to explore the factors contributing to increased productivity in people's lives and embarked on a new cycle of studies to assess individual capabilities. This effort ultimately led to the development of a gradual psychological well-being approach within the domain of positive psychology. Therefore, one prominent focus in recent years has been on psychological well-being, which seeks to redefine the professional life of individuals through the lens of positive psychology (Haghayeghi and Moghaddam Zadeh, 2022). O’Driscoll et al. (2004) were pioneers in formalizing the concept of psychological well-being within the framework of positive psychology. They emphasized the infusion of happiness and satisfaction into personal performance as a fundamental achievement of this concept.On the other hand, Gurel (2009) emphasizes active participation in the professional environment as key to defining psychological well-being. It involves individuals striving to experience positive self-efficacy and creating a balanced career while attributing meaning to their work relationships. Furthermore, Clark et al. (2007) view psychological well-being as an affective state. They assert that motivation in one's job is driven by the happiness and vitality derived from personal performance, which in turn fosters emotional attachment to one's job. Despite varying definitions of psychological well-being, it is evident that a deeper understanding of this concept is essential for greater effectiveness in the profession. MethodologyThe current study serves a developmental purpose and has an exploratory nature in its results. Furthermore, it adopts a combined approach in data collection. Given the lack of a coherent framework in previous studies for the phenomenon under investigation within the auditing profession, our study aims to present a multi-dimensional model using thematic analysis and the approach outlined by Attride-Stirling (2001) across three coding stages and interviews. In other words, in the first stage, it is attempted to present the themes of the auditors’ psychological well-being model in the form of a multi-dimensional model via analyzing the qualitative part and relying on thematic analysis process. The underlying philosophy of our study combines elements of volunteerism in the universe philosophy with structuralism in the philosophy of science. ResultsGiven the inductive and comparative nature of this study, the basic themes of auditors' psychological well-being are identified in the qualitative phase through thematic analysis. The reliability of these themes is then assessed using both Delphi Fuzzy and Delphi Classic analyses. The study proceeds to identify the most influential themes within the auditors' psychological well-being model through network analysis, specifically employing Fuzzy Analytic Network in the field of auditing. Therefore, thematic analysis was used in the first step to determine the themes related to the auditors’ psychological well-being. Thematic analysis serves as an administrative process that examines the foundations and concepts of the current issue through concurrent content analysis in related studies and interviews to define its dimensions. Typology of thematic analysis according to Attride-stirling (2001) is applied in the present study. The results indicated that strengthening the internal locus of control within the auditing profession (C13) is considered the most critical theme in enhancing psychological well-being in the auditing profession. This theme draws attention to bolstering the professional functions of independent auditors. This basic theme is considered among the organizing themes which stimulate the auditors’ perception and pervasive theme of individual mechanisms in reinforcing psychological well-being. DiscussionThe aim of this study is to conduct a network analysis within the auditors' psychological well-being model to define key factors in the auditing profession. Thematic analysis was chosen to present the model since there was no existing theoretical framework for developing the dimensions of psychological well-being in auditors' professional roles in this study. In total, a hexagonal model was constructed, consisting of three overarching themes, six organizing themes, and 38 basic themes. These themes were developed through 12 interviews with experts and three coding stages, guided by the theoretical saturation point, and were introduced as contributing factors to the development of auditors' psychological well-being. Confirming reliability of the organizing and basic themes was required as two important constructs in the presented model in the qualitative part with the purpose of determining the most effective theme in the auditors’ psychological well-being. Through two separate Delphi Fuzzy and Delphi Classic processes, it was initially found that the six organizing themes displayed high generalizability within recognized categories as pervasive themes. Secondly, out of the 38 primary themes, 21 basic themes were eliminated during two rounds of Delphi Classic analysis based on two criteria: mean and agreement coefficient. As a result, 17 basic themes were confirmed and incorporated into the Fuzzy Analytic Network process. ConclusionTwo key results emerged from the prioritization of organizing and basic themes in the analytical process. Prioritizing organizing themes revealed that the most impactful theme on psychological well-being in the field of professional auditing is 'stimulating the auditors’ perception' (C1), with a relative weight of 0.286, placing it at the top of the matrix. Conversely, 'reinforcing internal locus of control' (C13) was identified as the most crucial basic theme for enhancing psychological well-being in the auditing profession, highlighting its potential significance in strengthening the professional functions of independent auditors.
Mohammad Poorsamiei; Mohammadreza Abdoli; Hasan Valiyan; Mehdi Safari gerayli
Abstract
Critical thinking in any profession will help the dynamism of that profession to create responsibility. Auditing also requires critical thinking to meet the needs and expectations of stakeholders in the capital market, a thinking that better understands deviant approaches, distortion, and fraud in financial ...
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Critical thinking in any profession will help the dynamism of that profession to create responsibility. Auditing also requires critical thinking to meet the needs and expectations of stakeholders in the capital market, a thinking that better understands deviant approaches, distortion, and fraud in financial performance, and demonstrates a stronger understanding and intuition against such situations. This research seeks to identify the approaches of critical thinking of auditors and its representation in the form of link analysis. In order to identify the criteria for critical thinking in the profession, systematic search was used on theoretical foundations with the help of accounting experts. Through metasyn thesis analysis, the propositions related to critical thinking in the profession were identified and as a result, the components of analytical capability, inferential capability and intuitive capability were determined as important dimensions in creating critical thinking in the auditing profession. There was a systemic link between connections and impact. The results showed that in order to strengthen the approaches of critical thinking in professional judgments, the existence of technical and specialized knowledge is considered as an important stimulus that gives the auditor results such as improving the level of intuition and the power of mental analysis.
Mehdi Safari Grayeli; Alieh Balarastaghi
Abstract
This study examines the factors affecting the quality of corporate governance in listed companies in Tehran Stock Exchange. In order to achieve this goal a comprehensive index of 18 factors related to corporate governance, which are compatible with Iran's reporting environment as a measure of the quality ...
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This study examines the factors affecting the quality of corporate governance in listed companies in Tehran Stock Exchange. In order to achieve this goal a comprehensive index of 18 factors related to corporate governance, which are compatible with Iran's reporting environment as a measure of the quality of corporate governance, was prepared. By using a sample consists of 101 firms listed in Tehran stock exchange in the period of 1388 to 1392 and by taking advantage of multivariate regression techniques based on the pattern of the data grew, results showed that firm size, leverage and profitability have a significant positive effect on the quality of corporate governance. But firms' investment opportunities and quality of auditing don’t have a significant effect on the quality of corporate governance. Findings While filling the research gap in this area, Can be helpful for investors, securities and stock exchange organization, and other users of accounting information, In decision-making
