Accounting report
ehsan mohebi; jafar babajani; Mohammad Javad Salimi; mohammad taghi taghavi fard
Abstract
Regional Electric companies are organizations that pursue both social and financial goals in order to fulfill the assigned missions, so fulfilling the accountability due to their dual goals is of fundamental importance. In this research, by examining the information needs of the users of the financial ...
Read More
Regional Electric companies are organizations that pursue both social and financial goals in order to fulfill the assigned missions, so fulfilling the accountability due to their dual goals is of fundamental importance. In this research, by examining the information needs of the users of the financial reports, the effective factors in the financial reporting of the sector have been studied. The aim of this research is to present a model for the environmental conditions and characteristics of regional electric companies in Iran. For this purpose, the required data after library study and exploratory search in the theoretical foundations and financial and accounting rules and regulations governing the relations of these persons and using a questionnaire, collected and analyzed using the fuzzy Delphi research method and appropriate statistical tests. The evidence from the analysis of the views of the respondents shows that the influencing factors are in four dimensions, including the compatibility of the model in providing the achievement of the organization's goals, the needs of information users, compatibility with financial and accounting laws and regulations, and finally, budget control and credit status reporting. Experts also agree on the factors proposed by this research to design and explain the financial reporting model of regional power companies in Iran
Accounting report
Mohammad Javad Salimi; Ghassem blue; Maghsoud Amiri; Hamed Zakeri
Abstract
The earnings forecasts report is considered as one of the most important and effective reports in investors' decision-making. The purpose of this study is to present an earnings forecasts reporting framework in Iran's capital market. To achieve this research goal, the earnings forecasts reporting framework ...
Read More
The earnings forecasts report is considered as one of the most important and effective reports in investors' decision-making. The purpose of this study is to present an earnings forecasts reporting framework in Iran's capital market. To achieve this research goal, the earnings forecasts reporting framework was identified first by studying the theoretical foundations and the background of the research, as well as interviewing 21 experts using the snowball method and the theme analysis method. Then, through the implementation of the fuzzy Delphi method and solicitation of opinions from 183 experts using a questionnaire and targeted judgmental sampling method, a consensus was reached on the reporting framework, resulting in the presentation of the earnings forecasts reporting framework in Iran's capital market. The research population included university faculty members, employees in regulatory organizations, investors, auditors, and providers of financial information. The research results showed that out of 122 detailed themes extracted through theme analysis, categorized into six main themes and 14 sub-themes, 97 detailed themes obtained the consensus among the Delphi group, thereby forming components of the earnings forecasts reporting framework. The main elements of the earnings forecasts reporting framework encompass generalities, environmental fields, characteristics, consequences, challenges, and evaluation. The findings of this research can serve as a guide for developing financial reporting standards and modifying procedures and regulations.IntroductionThe management forecasts earnings is one of the disclosed information outside the financial statements, which reflects the management's forecast about the future prospects. This report is one of the most important sources of information for companies in the capital market. Corporate management possesses considerable information advantages about contingencies related to future profitability. Management disclosures are considered a valuable and potential source of information for investors. Investors are interested in estimating the future benefits of their investment so that they can assess receiving future cash earnings as well as the value of their shares. Therefore, the expected earnings from companies are important for investors and beneficiaries to make investment decisions.How to present the earnings forecast report has been a challenging issue in recent years. Therefore, in the current situation, examining the framework and reporting method of earnings forecasting in the Iranian capital market using the opinions of experts is regarded as an essential need.Considering the importance of earnings forecast reporting for investors, the problem of the current research is: What is the earnings forecast reporting framework in Iran's capital market? Additionally, what are the components of this framework based on the country's economic and capital market conditions? Literature ReviewThere are several reasons for disclosing the information of managers and publishing the earnings forecast report. One reason for this is agency theory, which refers to the conflict of interests between managers and owners. In addition, we can refer to the Signaling theory, Expectation adjustment hypothesis, and Legal liability hypothesis.The primary framework of earnings forecasting reporting includes the purpose, users, limitations, environmental fields, characteristics, and consequences.Hirst et al. (2008) provided a framework regarding management earnings forecasting. They categorized earnings forecasts into three components including antecedents, characteristics, and consequences. They concluded that earnings forecasting characteristics are less explored in both theoretical and empirical research, despite managers having the most control over this component.Preussner and Aschauer (2022) synthesized the literature on management earnings forecasts and adaption mechanisms, combined existing theories into a unifying framework. Overall, the literature review provides strong support for a positive correlation between the extent and credibility of management earnings forecasts, on the one hand, and stock returns, share liquidity, and analyst coverage, on the other hand. Earnings forecasts tend to be optimistically biased, with a positive correlation with forecast uncertainty, earnings flexibility, financial distress, investor sentiment, and the share price dependency of managers' remuneration. Firm growth, legal liability, and litigation risk are significantly associated with forecast pessimism.Until 2017, listed companies in Tehran Stock Exchange published an independent report titled earnings forecasts report. The Securities and Exchange Organization announced in a notification that since January 2018, the Issuers are not allowed to publish earnings forecasts report. Instead, they are required to prepare and disclose the management's interpretive report alongside the interim and annual financial statements. Recently, as of July 2021, the return of the earnings forecast report was announced with a new procedure for five industries.MethodologyTo achieve the goal of the research, the primary framework was first identified by studying the literature review and theoretical background. Semi-structured interviews were then conducted with 21 experts using the snowball sampling method. The data from the interview was analyzed using the theme analysis method and the earnings forecasts reporting framework was extracted according to the country's environmental characteristics. Finally, the fuzzy Delphi method was implemented and opinions were gathered from 183 experts through a questionnaire and targeted judgment sampling method to reach a consensus on the earnings forecasts reporting framework.The statistical population of the research included university faculty members, employees in regulatory organizations, investors, auditors, and providers of financial information.ResultsThe research results showed that out of 122 detailed themes extracted through theme analysis, which were categorized into 6 main themes and 14 sub-themes, 97 detailed themes obtained consensus from the Delphi group and were identified as components of the earnings forecasts reporting framework. The main themes of the framework are generalities, environmental fields, characteristics, consequences, challenges, and evaluation. Each main theme consists of sub-themes. For example, the generalities theme includes sub-themes such as purpose, users, and limitations. The environmental fields theme covers aspects related to the forecast environment and company characteristics. The characteristics theme encompasses the method of publishing, features, text of the report, and assurance. The consequences theme addresses the consequences of publishing and non-publishing. The challenges theme explores the challenges in the environment and the company. Lastly, the evaluation theme focuses on the evaluation of the disclosure procedure.DiscussionThe findings of this research can serve as a valuable guide for developing financial reporting standards and modifying procedures and regulations.The paper has some limitations. The use of questionnaires, which is common in humanities research, is inherently limited, and this research is no exception. The time limitation, the diverse knowledge base of the experts, and their interest in the research topic may have influenced the quality of the experts' responses to the questionnaire.ConclusionThis research has presented the earnings forecasts reporting framework in Iran's capital market, consisting of 6 main themes. The results of this study can help Iran's Accounting Standards Development Committee in developing standards. Furthermore, the Securities and Exchange Organization can use the framework, particularly for the evaluation theme to modify and present regulations related to earnings forecasting reporting. Additionally, investors can use the results of this research to enhance their understanding about the earnings forecast report and make more informed investment decisions. Issuers can also use the framework to improve information disclosure and prepare reports.AcknowledgmentsI am grateful to all the esteemed professors and experts who helped me in this way. I would also like to express my gratitude to the staff of Allameh Tabataba’i University for their cooperation.
Javad Alizadeh; Javad Dustjabbarian
Abstract
The herd behavior of investors is of the most noticeable issues in finance. Herd behavior could lead to an increase in volatility of share prices and its deviation from intrinsic value. There have been some investigations on this issue in recent years which prove the presence of herd behavior in the ...
Read More
The herd behavior of investors is of the most noticeable issues in finance. Herd behavior could lead to an increase in volatility of share prices and its deviation from intrinsic value. There have been some investigations on this issue in recent years which prove the presence of herd behavior in the Tehran Stock Exchange. However, few of them seek to study the impact of various stock traits on investors’ behavior. This study aims to regard the idiosyncratic risk as a possible determinant of herding and consider its impact on the extreme market condition, up and down markets. Using companies listed in Tehran Stock Exchange between 1388 to 1394(Iranian calendar), the results demonstrate that the idiosyncratic risk could intensify the herd behavior of investors in extreme down markets. In addition, for stocks with lower idiosyncratic risk, herding could be observed in down markets.
Abolfazl Jafari; Mohammad Javad Salimi; Jafar Babajani
Abstract
One of the essential needs for Iranian financial market participants (including money market and capital market participants) is rating them based on their financial strength rating. This rating help stakeholders, including shareholders, investors, customers, central bank and etc., to obtain more accurate ...
Read More
One of the essential needs for Iranian financial market participants (including money market and capital market participants) is rating them based on their financial strength rating. This rating help stakeholders, including shareholders, investors, customers, central bank and etc., to obtain more accurate information regarding inherent safety and soundness of Iranian banks. So the aim of this study is rating Iranian banks, based on financial strength, certainly whose listed on the Tehran Stock Exchange (TSE) and Iran OTC market. All under studied banks were separated into two groups of privatized and non-governmental banks. The period of the research is 5 years from 2012 to 2016. For this purpose, first a financial strength score was determined for each of the banks by using a reflective component-based model which is constructed from 4 dimensions, 8 factors and 51 indicators, Then the banks was ranked based on their financial strength scores in two separate groups of privatized and non-governmental banks. The results show that privatized banks compared with non-governmental banks have higher financial strength scores. In the group of privatized banks, Bank Mellat had the highest score and hence the highest rank in terms of financial strength. In the group of non-governmental banks, Bank Pasargad, Parsian Bank and EN bank, respectively had the highest scored and hence the highest ranks in terms of financial strength.
