Accounting report
Fahime Ebrahimi; Mohammad Hosein Setayesh; Hamidreza Zareifard
Abstract
Prospect theory explains how individuals’ feelings and preferences influence their decision-making. The purpose of this research was to investigate earnings manipulation incentives within companies listed in Tehran Stock Exchange using fourfold pattern of risk attitudes provided by the cumulative ...
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Prospect theory explains how individuals’ feelings and preferences influence their decision-making. The purpose of this research was to investigate earnings manipulation incentives within companies listed in Tehran Stock Exchange using fourfold pattern of risk attitudes provided by the cumulative prospect theory. The period of this research was 6 years, from 2013 to 2018 and included 695 observations. Hypothesis testing using logistic regression, with the average competitor performance within the industry as the reference point, revealed a significant positive (vs. negative) effect of management’s loss (vs. gain) estimates relative to the reference point on earnings manipulation. In other words, when management’s estimate of the likelihood of loss relative to the reference point is high (vs. low), the likelihood of earnings manipulation increases (vs. decreases). Furthermore, when management’s estimate of the likelihood of gain relative to the reference point is low (vs. high), the likelihood of earnings manipulation increases (vs. decreases). The findings of research also provided evidence for loss-aversion among managers. Therefore, the evidence suggests that the cumulative prospect theory can be utilized to explain managerial incentives for earnings manipulation.
mohammad namazi
Abstract
The present research is aimed at modeling and prioritizing effective factors in the intention of internal reporting of frauds in the financial statements by accountants. For this purpose, the effect of organizational justice, attitude towards whistle-blowing, personal cost of reporting, proactive personality ...
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The present research is aimed at modeling and prioritizing effective factors in the intention of internal reporting of frauds in the financial statements by accountants. For this purpose, the effect of organizational justice, attitude towards whistle-blowing, personal cost of reporting, proactive personality traits, religiosity, and moral intensity are studied. The research is based on is a survey research, and the statistical population of the study is the accountants of the companies listed in Tehran Stock Exchange in 2015. The results of testing hypotheses were obtained by exerting rdinary least squares regression, and they indicate that such variables as organizational justice, attitude towards whistle-blowing, religiosity and moral intensity posit positive and significant effect on the intention of reporting fraud in the financial statements. The results also show that the theory of organizational justice has the potential to be used in implementation of effective mechanisms of whistle-blowing. In addition, in order to increase the effectiveness of mechanisms implemented with the aim of promoting whistle-blowing, it is of importance to pay attention to solutions such as execution of educational moral programs and cultural and religious plans, which would have a positive effect on religiosity and attitude.
