Financial Accounting
Azam Valizadeh Larijani; Farzaneh Yousefi Asl; Fatemeh Shirzadi; Niloofar Zamani
Abstract
One of the reports that companies are required to publish at the discretion of the Securities and Exchange Organization is the management interpretive report. Therefore, in this research, the relation between the presentation of management interpretative reports by companies and earnings management has ...
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One of the reports that companies are required to publish at the discretion of the Securities and Exchange Organization is the management interpretive report. Therefore, in this research, the relation between the presentation of management interpretative reports by companies and earnings management has been investigated. Also, considering the importance of the role of women in improving the financial reporting of companies, the effect of the presence of women in the board of directors on the aforementioned relation has been investigated. The statistical population of this research is the companies listed in the Tehran Stock Exchange and the Iranian Fara burse during the years 2011 to 2022. The hypotheses of this research have been tested using linear regression. The results of the research showed that the provision of interpretative management reports by companies has reduced earnings management. Also, the decrease in earnings management is more among companies that have used the presence of women among their board members.
Financial Accounting
Alireza Javadipour; jafar babajani; Ghasem blue; vajhollah ghorbanizadeh
Abstract
Due to the lack of comprehensive research in the country in order to provide a model to evaluate the performance of the audit committee, the present research has addressed this issue and a practical model for the use of the activities of the audit committee has been presented.Method: The research method ...
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Due to the lack of comprehensive research in the country in order to provide a model to evaluate the performance of the audit committee, the present research has addressed this issue and a practical model for the use of the activities of the audit committee has been presented.Method: The research method used in the first stage of the research was extracting the dimensions, components and performance evaluation indicators of the audit committee from the theoretical sources of the research. Then, the fuzzy Delphi method was used to screen the indicators, and the best-worst (BWM) multi-criteria decision-making method was used to weight each dimension, component, and index.Findings: The model obtained in the current research includes 3 parts of evaluating the individual characteristics of the members of the audit committee, evaluating the work processes and reporting of the audit committee, and evaluating its duties and responsibilities, and the final model includes 3 dimensions, 13 components and 78indicator.Conclusion: According to the findings of the research, the important components in evaluating the performance of the audit committee are the audit committee meetings, the audit committee resources, communication with the board of directors, the audit committee charter, and monitoring of financial reporting. Also, the results showed that the working and reporting processes of the audit committee have the most weight in the evaluation of the audit committee's performance, and the evaluation of the audit committee meetings as the focus of the audit committee's activities is the most important among the evaluation components.
Financial Accounting
Javad Shekarkhah; Mohammad javad Salimi; Seyed Soroush Ghazinoori; Ali Hedayati Bilondi
Abstract
Pension funds in Iran use defined benefit pension plan and their sustainability is important. However, the evaluation of their sustainability has always been criticized. Minimum reporting and simple accountability indicators do not meet the informational needs of stakeholders. Thus, the main issue is ...
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Pension funds in Iran use defined benefit pension plan and their sustainability is important. However, the evaluation of their sustainability has always been criticized. Minimum reporting and simple accountability indicators do not meet the informational needs of stakeholders. Thus, the main issue is to identify the indicators and standards for comprehensive evaluation of financial sustainability. To address this issue, the theoretical foundations of sustainability evaluation of pension funds and the indicators applied by other countries and international organizations were examined. The indicators were presented to experts for receiving their opinions and in order to reach a consensus on key indicators a fuzzy Delphi method was applied. For ranking and developing a combined indicator, the final indicator was obtained using experts' opinions and the SWARA method. 27 indicators in four dimensions were extracted from the theoretical foundations: equity, adequacy, financial, and innovation. According to the results of the fuzzy Delphi method, 15 key indicators were confirmed finally. Among the key indicators, the support ratio obtained the first rank, while the replacement rate and penetration coefficient obtained the second and third ranks, respectively. The results of the SWARA method confirmed the combined indicator consisting of equity dimension (1 sub-indicator), adequacy dimension (3 sub-indicators), and financial dimension (11 sub-indicators). The weight of equity, adequacy and financial in the combined indicator is equal to 6%, 21%, and 73%, respectively. The support ratio, present value of Assets to Liabilities Ratio, and actuary analysis obtained ranks 1 to 3. the financial dimension has the highest importance,
Financial Accounting
Mehdi Dasti; Mohammad Firouzian Nezhad; Ali Mahmoodi
Abstract
The purpose of this study is Evaluating the reduction of the government's financial burden through the typology of drivers affecting generational accounting in the capital market by action research. In terms of methodology, this study has used Colaizzi's model (1978) to implement action research steps. ...
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The purpose of this study is Evaluating the reduction of the government's financial burden through the typology of drivers affecting generational accounting in the capital market by action research. In terms of methodology, this study has used Colaizzi's model (1978) to implement action research steps. Therefore, based on this model, first, through interviews with experts and open coding, an effort was made to identify n Effective drivers on the implementation of generational accounting in capital market companies. Then, in order to validate the propositions, a critical evaluation was done to compare the propositions with similar researches, so that the propositions can enter the stage of forming a focus group to discuss and exchange opinions for the cognitive separation of each proposition in the form of a category. Then, through Q evaluation checklist, each statement was scored between +4 and -4, and finally, a 4-level matrix was created with the aim of creating a foundation of effective drivers in the implementation of generational accounting with the aim of reducing the government's financial burden on future generations. The results showed that a total of 22 propositions were identified from a total of 12 interviews and 217 open codes created. On the other hand, it was determined in the quantitative section, 22 criteria identified in 4 categories were the creators of the generational accounting typology framework of capital market companies.
Financial Accounting
Mohamad Marfo; Mohammad javad Salimi; Iman Raeesi Vanani; Mojtaba Alifamian
Abstract
Purpose: The rapid development of technology and extensive environmental changes have accelerated economic growth, and the increasing competition among enterprises has restricted access to profit and increased the probability of enterprises ' financial distress. Due to the effects of high costs of financial ...
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Purpose: The rapid development of technology and extensive environmental changes have accelerated economic growth, and the increasing competition among enterprises has restricted access to profit and increased the probability of enterprises ' financial distress. Due to the effects of high costs of financial distress, its prediction has attracted the attention of researchers since the beginning. Therefore, this paper aims at a bibliometric analysis of financial distress research in the accounting, management and economic areas. Design/methodology/approach: The research method is based on a three-step protocol of dataset setting, dataset refining, and analyzing the data. First, the published articles in the financial distress field were collected from the Web of Science database. Second, the document information was refined, and 801 articles were chosen for literature review in this area. Finally, we used the bibliometric analysis toolbox to investigate the documents. Also, bibliometric analysis in this research was conducted using VOSviewer software. Findings: The findings of this research indicate the existence of six main streams of research (methods of predicting financial distress, predictors of financial distress, restructuring strategy, corporate governance, bank bankruptcy and earnings management) in the field of financial distress. Additionally, the results highlight the importance of social responsibility of the company, also demonstrate that improvements in technology, particularly the use of artificial intelligence tools, have enhanced predicting accuracy. IntroductionIn the life cycle of any company, while there are many opportunities for growth, prosperity, and success, there are also situations where the company may face decline, crisis, and failure. Theoretically, it is assumed that business companies operate indefinitely with the aim of making a profit.However, in the modern era of the global economy, companies not only become significantly more established but also face financial distress more frequently than in the past. In other words, due to globalization and the integration of national economies, the incidence of business failures and bankruptcies has risen. Financial failure is not an instantaneous event but a dynamic and generally lengthy process that affects the company's capital structure, investment policies, and performance. Therefore, identifying the factors of financial distress enables the prediction of an enterprise's financial distress.Identifying the factors influencing the financial distress of companies, firstly, enables the taking of appropriate actions by providing necessary warnings. Secondly, investors can distinguish favorable investment opportunities from unfavorable ones and invest their resources in situations and places where they are less likely to lose money.Given the importance and effects of financial distress and the high rate of failure of current businesses, a literature analysis in this area appears necessary. A review of the literature in the field of financial distress uncovers a multitude and variety of topics in past research. Thus, it is crucial to conduct a systematic review of past research to understand its intellectual structure. Moreover, the keywords used in past research represent the field’s main ideas and topics. Therefore, this study is going to draw the intellectual structure of financial distress research through quantitative techniques of co-word analysis, citation, co-citation, bibliometric, and co-authorship analysis. Research Question(s)This research, employing bibliometric analysis, reviewed the literature on financial distress in the fields of accounting, management, and economics. It also analyzed the content of articles in this field to answer the following questions:RQ1. What is the trend of publications in financial distress research?RQ2. What is the citation structure in the financial distress research?RQ3. What are the fundamental streams of financial distress research?RQ4. What are the emerging themes in the financial distress research? MethodologyThe research method is based on a three-step protocol: dataset setting, dataset refining, and analyzing the data. First, the published articles in the financial distress field were collected from the Web of Science database. Second, the document information was refined, and 801 articles were chosen for literature review in this area. Finally, we used the bibliometric analysis toolbox to investigate the documents. Additionally, bibliometric analysis in this research was conducted using VOSviewer software. ResultsOur findings indicate an increasing trend in the number of research studies on financial distress literature over the past six years, with approximately 54% of articles published during this period.We also document that "In Search of Distress Risk" is the most cited paper, receiving 881 citations in the Web of Science database; "Altman" is identified as the most influential author; and the USA emerges as the most influential country in this research field. This predominance can largely be attributed to the fact that most journals indexed in the Web of Science in the fields of accounting and finance are associated with the United States. Consequently, it is evident that the publication of articles by universities and researchers based in this country is more prevalent than in other countries worldwide. The findings of this research reveal the existence of six main streams of research: methods of predicting financial distress, predictors of financial distress, restructuring strategy, corporate governance, bank bankruptcy, and earnings management in the field of financial distress. Additionally, the results of the research not only underscore the importance of a company’s social responsibility but also highlight how technological advancements, particularly the use of artificial intelligence tools, have enhanced the accuracy of financial distress predictions. Discussion and ConclusionIn this study, first, the evolution of literature in this field has been reviewed through bibliometric analysis over the last four decades. Secondly, from a performance perspective, the indicators related to the article, citation indicators, and combined article and citation indicators have been examined. Additionally, scientific mapping of articles in this field has been conducted through citation analysis, co-citation analysis, co-authorship analysis, and co-word analysis. Finally, clustering and content analysis of the articles in this field have been performed.First, performance analysis was conducted to answer the first two research questions. The research findings confirm that during the last four decades, the literature on financial distress has significantly grown. Examining the growth trend of the articles’ number indicates the effect of changes in the business environment on financial distress. Thus, this trend shows an increase in the number of articles from 2010 onwards, the reason for which is attributed to the financial crisis of 2008, which caused many companies to face financial distress due to the impossibility of financing. Additionally, the trend of published articles shows a significant increase in articles during the period of COVID-19 and after (2020, 2022, 2023). The limitation caused by this public crisis (COVID-19) has increased the possibility of financial distress for companies, and many researchers have investigated this issue. Secondly, to examine the third question of the research, co-citation and bibliographic coupling analysis have been used. As indicated in the mentioned findings section, the studies conducted can be classified into three clusters: predicting financial distress, which is mainly based on accounting data criteria; a cluster of default risk and systematic risk, which provides information about the prospects of the company and the volatility of assets; and finally, the cluster of restructuring strategies, which includes studies that seek to exit this cycle of financial distress using these strategies. The Bibliographic coupling analysis indicates that six main streams of research (financial distress prediction methods, financial distress prediction factors, restructuring strategy, corporate governance, bankruptcy of banks, and earnings management) exist in the financial distress field.Thirdly, the co-word analysis was conducted to answer the fourth question of the research. The increase in the frequency of the words ‘machine learning’ and ‘social responsibility of the company’ in recent years indicates the development of advanced techniques and models in data mining. This development has become so widespread that a large number of research papers are published every year in many fields, including finance, using techniques and algorithms of artificial intelligence and machine learning. Additionally, regarding social responsibility, this trend suggests the primary purpose of enterprises has shifted from profit maximization to increasing shareholder wealth and protecting the interests of other stakeholders, including society and the environment. Therefore, it is expected that future studies will focus increasingly on social responsibility and sustainability.
Financial Accounting
Abbas Aflatooni; Kefsan mansouri; Zahra Nikbakht
Abstract
The accounting information quality and its relationship with financing decision-making is one of the important issues that attract interest from researchers. However, the way accounting information quality affects financing costs during the COVID-19 pandemic is a topic that has not been explored in domestic ...
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The accounting information quality and its relationship with financing decision-making is one of the important issues that attract interest from researchers. However, the way accounting information quality affects financing costs during the COVID-19 pandemic is a topic that has not been explored in domestic research. The purpose of this research is to investigate the effect of the accounting information quality on the cost of debt and to explore how this effect mainfested during the pandemic of COVID-19. In this regard, the data from 137 firms listed on Tehran Stock Exchange for 2012-2022 (1057 firm-years) have been analyzed. The generalized least squares (GLS) approach was employed to fit the models and fixed effects for years and industries were also controlled. The research results for the entire period demonstrate that an increase in accruals quality (as a proxy for accounting information quality) leads to the cost of financing through debts and this decrease is more pronounced for innate accruals quality than for discretionary accruals quality. Furthermore, the findings suggest that during the period of the COVID-19 pandemic, the impact of accruals quality and its innate and discretionary components on the cost of debt diminished. The results of the robustness tests using decile-ranked values of accruals quality support the main findings.IntroductionThe global pandemic of COVID-19 and the economic recession related to it brought many challenges to companies in most countries (Barai & Dhar, 2021). Due to the widespread effects of this disease and the various and costly measures taken by countries to control this pandemic, during the outbreak of COVID-19, the economic activities of companies faced a serious challenge (Aljughaiman et al., 2023). COVID-19 had a significant negative impact on the employment level of the workforce, reduced economic activity, and created high levels of uncertainty in many financial markets (Zhang et al., 2020). These conditions have most likely hurt the accounting information quality (Pham et al., 2023; Chen et al., 2023) and due to the inverse relationship between the accounting information quality and the cost of debt, it has led to an increase in the cost of debt. However, most of the empirical evidence in this regard is related to developed countries such as the United States, the United Kingdom, and Australia, and the evidence on emerging markets (such as the Iranian capital market) is limited in this regard. Therefore, this study aims to investigate the relationship between the accruals quality and the cost of debt and to compare the extent of this relationship during the COVID-19 pandemic and other years.Literature ReviewIn accounting, accruals refer to a part of earnings that does not carry cash flow and is a product of the accrual accounting system. Therefore, accruals represent the difference between earnings and cash flows (Nallareddy et al., 2020). Since accruals are affected by managerial discretion, the accruals quality can be used to evaluate the accounting information quality and predict future cash flows (Le et al., 2021). The COVID-19 pandemic has significantly affected the global economy (Zhu & Song, 2021), involved many businesses in financial difficulties (Albitar et al., 2020) and intensified their dependence on resources provided by creditors and investors (Shen et al., 2020). Most likely, these conditions have affected the accounting information quality (Pham et al., 2023). During the COVID-19 pandemic, most companies have had enough motivation for earnings management (Lassoued & Khanchel, 2021). However, earnings management causes the financial information reported by companies to be inconsistent with their actual situation, and this means reducing the accounting information quality (Tariverdi et al., 2012). According to these materials, the research hypotheses are presented as follows:H1: An increase in the quality of accruals causes a decrease in the cost of debt.H2: In the period of the COVID-19 pandemic, the intensity of the effect of accruals quality on the cost of debt has decreased.MethodologyThis research is practical, analytical, quasi-experimental, correlational in terms of research purpose, and retrospective and post-event in terms of the time dimension of the data. To collect financial and accounting data, Rahvard Novin database and reports published on Codal website were used, and Stata software was used to analyze the data. To fit the models, the generalized least squares approach was used.ResultsThe results show that compared to other years, during the COVID-19 pandemic, the accruals quality (the cost of debt) has decreased (increased) by 27% (35%). Also, the results indicate that an increase in accruals quality decreases the cost of debt. Furthermore, our results show that compared to other years, during the COVID-19 pandemic, the intensity of the effect of the accruals quality on the cost of debt has decreased.DiscussionThe research findings show that an increase in accruals quality significantly decreases the cost of financing. So, in order to reduce financing costs from debts, managers are advised to be diligent in improving the companies' accounting information quality. Finally, our results show that the cost of debt has increased during the COVID-19 pandemic, due to the decline in accruals quality and its components.ConclusionOur results show that with the increase in the quality of accruals, the cost of financing through debts has a significant decrease, and this decrease is more for the innate components of accruals quality than for its discretionary part. In addition, the findings indicate that during the COVID-19 pandemic, the intensity of the effect of the accruals quality and its innate and discretionary components on the cost of debt has decreased. The results of supplementary tests confirm the research main findings.
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
Financial Accounting
Behrooz Badpa; Sohrab Osta; Fatemeh Darvish-Hoseini
Abstract
Working capital management is crucial for business growth and survival as it maximizes enterprise value and shareholder wealth, thereby maintaining competitive conditions and optimal performance. This study identified and explained accounting variables determining operational efficiency (OE) of the companies ...
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Working capital management is crucial for business growth and survival as it maximizes enterprise value and shareholder wealth, thereby maintaining competitive conditions and optimal performance. This study identified and explained accounting variables determining operational efficiency (OE) of the companies listed on the Tehran Stock Exchange (TSE), Iran, in light of working capital items. The statistical population consisted of all companies, and the samples were 112 cases listed during 2016-2020. Utilizing an applied, descriptive-correlational research design, the relationship between the variables was then established. The dependent variable was OE, evaluated using data envelopment analysis (DEA); and the independent ones were working capital items and dividend growth rate. To investigate the effect of the independent variables on the dependent one, eight hypotheses were formulated, and multivariate linear regression with panel data in a fixed-effects model was implemented. Testing the hypotheses at a 95% confidence interval demonstrated that average period of collection of claims, average debt repayment period, dividend growth ratio, cash holding level, and liquidity ratio have a significant positive effect on OE. Nevertheless, the cash conversion cycle, and average inventory turnover period have negative impacts. Managers are thus suggested to identify working capital items and exploit them along with short/long-term goals in companies. This is practical in evaluating financial flexibility and solvency, facilitating optimal liquidity, and increasing business profitability and performance. Furthermore, learning about such items is helpful to investors, creditors, and analysts to make optimal decisions. IntroductionWorking capital management in companies plays a key role in their growth and survival. This business process also helps increase the value of such entities and maximize their shareholder wealth, thereby maintaining competitive conditions and optimal performance. Representing the management of current resources and expenses in a company, working capital management has two components, namely, the management of current assets and liabilities, whose balance is of utmost importance. Decisions made about each one can affect the other (Jahan Khani & Talebi, 1999). On the word of Nath et al. (2010), working capital items have a critical role in the operational efficiency (OE) of a company as well as its marketing capability. In this line, Fang et al. (2008) also believe that working capital items have high liquidity, and are directly associated with the operating results and efficiency of a company, so managing cash in the short term is especially relevant for competition in markets. Therefore, the main items in working capital can significantly shape the operating results in a company, including contribution margin, market share, and OE. Against this background, the present study is to identify and explain the accounting variables determining the OE of the companies listed on the Tehran Stock Exchange (TSE), Iran, in light of the working capital items.Materials & MethodsConsidering the type of supervision and the degree of control, this study is categorized as field research, because the variables were investigated in their natural state. With regard to the data collection method, this study is placed into documentary research. Utilizing an applied, descriptive research design, the relationship between the given variables was established via a correlational study. The statistical population comprised the companies listed on the TSE, Iran, and the study samples included 112 cases listed during 2016-2020. The dependent variable was OE, evaluated using data envelopment analysis (DEA), and the independent variables were working capital items and dividend growth rate. Profitability index, company size, financial leverage, and operating cash flow (OCF) were correspondingly deemed as the control variables in the research model. To shed light on the effect of the independent variables on the dependent one, eight hypotheses were initially formulated, and then multivariate linear regression using panel data in a fixed-effects model was implemented to test them. In order to analyze the data and interpret the results, descriptive and inferential statistics were ultimately utilized.FindingsUpon presenting the descriptive statistics and checking the assumptions of the regression as well as determining themost suitable research model, the linear regression equation was estimated using the fixed-effects model, as described in table 1Discussion & ConclusionAs confirmed by the study findings, working capital items can explain the OE of the companies listed on the TSE, Iran. In this respect, the results of testing the main research hypothesis are consistent with the reports by Sun et al. (2020) and Nath et al. (2010). The outcomes of testing the secondary hypotheses also reveal a significant positive relationship between the variables of average period of collection of claims, average debt repayment period, dividend growth ratio, cash holding level, and liquidity ratio and the variable of operational efficiency. Nevertheless, there is a significant negative relationship between the variables of cash conversion cycle and average inventory turnover period and operational efficiency.Considering these results, cash holding level and liquidity ratio have a positive effect on operational efficiency, which supports the findings in Nath et al. (2010). According to Nath et al. (2010), working capital items with high liquidity help improve the OE of a company, indicating its high capability to manage cash in the short term, as a requirement for its competitive presence in markets. The study results also agree with those concluded by Afrifa et al. (2022) that holding more cash facilitates working capital efficiency. Based on the study findings, average inventory turnover period has a negative effect on OE, in harmony with the results in Deloof (2003) that high inventory level declines the profitability and performance of a company. In his opinion, managers can increase the profitability and performance of businesses by reducing inventory levels. In view of the cash conversion cycle in the given companies during the study period here, the relationship between this variable and OE is negative, which is consistent with the results in Abdulla et al. (2017) that companies with higher cash conversion cycle are more efficient in managing their working capital as compared with other entities.From this perspective, managers are suggested to identify the role of working capital items and exploit them in line with the short/long-term goals in companies. This is practical in evaluating financial flexibility and solvency, and facilitates achieving optimal liquidity, and subsequently increasing business profitability and performance. Furthermore, learning about the role of working capital items is of assistance to investors, creditors, and analysts to make optimal decisions. Furthermore, it is possible to carry out the same study in the future with respect to the size and type of industry of the companies listed on the TSE, Iran, and complete a comparative study regarding the companies operating in each industry. Besides, it is recommended to analyze the effect of various working capital strategies on economic added value in a separate study. Investigating the effect of various strategies and components of working capital on stock price and its fluctuations should also be the subject of further research.
Financial Accounting
Sajad Naghdi; Roghayye Jeddi
Abstract
The willingness of accountants to participate in the certified public accountant (CPA) exam has led to a highly competitive and challenging environment. Therefore, the aim of this research is to explore the lived experiences of CPA candidates. Given the psychological orientations, the unique scientific ...
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The willingness of accountants to participate in the certified public accountant (CPA) exam has led to a highly competitive and challenging environment. Therefore, the aim of this research is to explore the lived experiences of CPA candidates. Given the psychological orientations, the unique scientific and social structure of the candidates, and the multi-dimensionality of the exam, an interpretive paradigm and the qualitative method of phenomenology were employed for an in-depth study without statistical calculations. This study involved 37 participants, comprising 16 CPAs and 21 individuals who were rejected candidates, chosen through purposeful sampling. Data collection was conducted using the semi-structured interview method until the theoretical saturation limit was attained. Data analysis was carried out in five stages using Giorgi's method. The analysis yielded four main themes: weaknesses and limitations, structural challenges, strengths, and solutions to enhance the exam's quality. Each main theme encompassed three sub-themes with 99 narratives. Additionally, despite differing perspectives among candidates, a strong emphasis on the lack of educational resources, particularly in accounting and auditing courses, was noted. The findings also highlight a need to broaden the exam's scope to cover technical skills and reduce theoretical questions. Overall, the research underscores the significance of developing educational resources and focusing on practical questions to address the primary concerns of the candidates. IntroductionThe willingness of accountants to participate in the certified public accountant (CPA) exam has led to a highly competitive and challenging environment. Therefore, the aim of this research is to explore the lived experiences of CPA candidates. Since the accounting profession is continuously evolving and its complexity is increasing every day, it is necessary to consider this dynamic in the process of determining the qualification of certified public accountant. Some professionals have raised concerns about the design of the CPA exam, particularly regarding questions that are incorrectly framed, ambiguous, or have multiple or no correct answers. This issue often leads to candidates wasting time on such questions during the exam, a loss that cannot be compensated. Furthermore, the exam's administration also poses problems, such as an unfavorable physical environment and the use of non-professional proctors, contributing to stress. These factors collectively result in anxiety and psychosis both during and after the exam. Therefore, the systematic evaluation of various dimensions of the certified public accountant exam with the direct participation of the candidates can help identify and rectify the existing gaps and limitations. The findings from this research could then inform policy-making and program formulation within the certified accountant community.Literature ReviewConsidering the importance of the role of certified public accountant in society, the process of selecting and verifying their qualifications is also very important. For the first time, at the end of the 19th century, chartered accountants emerged as an institution in Britain, which at that time had the most advanced financial and economic system. Early in the 20th century, this institution started working in the United States of America. However, the pathology of the process of determining the qualification of a certified public accountant in Iran has shown several key challenges. These challenges include exam content and conducting method, necessary features to become a CPA, certification conditions and exam structure.MethodologyGiven the psychological orientations, the unique scientific and social structure of the candidates, and the multi-dimensionality of the exam, an interpretive paradigm and the qualitative method of phenomenology were employed for an in-depth study without statistical calculations. This study involved 37 participants, comprising 16 CPAs and 21 individuals who were rejected candidates, chosen through purposeful sampling. Data collection was conducted using the semi-structured interview method until the theoretical saturation limit was attained. Data analysis was carried out in five stages using Giorgi's method.ResultsThe analysis yielded four main themes: weaknesses and limitations, structural challenges, strengths, and solutions to enhance the exam's quality. Each main theme encompassed three sub-themes with 99 narratives. Additionally, despite differing perspectives among candidates, a strong emphasis on the lack of educational resources, particularly in accounting and auditing courses, was noted. The findings also highlight a need to broaden the exam's scope to cover technical skills and reduce theoretical questions.DiscussionObtaining the title of a CPA is a coveted goal for accountants from the onset of their careers. Consequently, it is essential to ensure that individuals who successfully navigate through the CPA qualification process possess the minimum required skills and expertise. The dynamic nature of economic, social, technological, environmental, and legal components continually influences the competencies and capabilities required of certified public accountants. Currently, the CPA exam in Iran faces criticism from professional accounting members, highlighting a clear concern: the existing procedures for determining the qualifications of CPAs are not adequately keeping pace with the rapid environmental changes.ConclusionIn general, the findings of this study indicate the importance of developing educational resources and focusing on practical questions, reflecting the primary concerns of CPA exam candidates. The lack of educational resources were emphasized by the majority of participants. Therefore, it is necessary for the community of certified public accountants to collaborate effectively with academic professionals. This collaboration should aim to produce textbooks and exam questions that are closely aligned with the curriculum, particularly in areas of accounting and auditing. It is recommended to include questions that assess talent skills such as comprehension, reasoning, and verbal abilities, as well as technical competencies like computer and Excel skills. Furthermore, the design of the questions should be such that they can be answered effectively only by candidates with relevant work experience (practical work) and those who have engaged in extensive and in-depth study (beyond mere memorization) of the subject matter. Considering the nature of the CPA exam, it is suggested to incorporate a wide range of questions to thoroughly evaluate a candidate's knowledge across all subjects. This approach should extend beyond just a few standards or specific areas to ensure that the candidates possess a well-rounded understanding of the entire curriculum.
Financial Accounting
Mohammad Hossein Setayesh; Zahra Rezaeianzadeh
Abstract
The main goal of this research is to identify and rank factors affecting innovation in accounting. In this research, firstly, accounting specialists were selected by purposeful sampling methods, and then qualitative data were collected using open questionnaires. After analyzing the collected data using ...
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The main goal of this research is to identify and rank factors affecting innovation in accounting. In this research, firstly, accounting specialists were selected by purposeful sampling methods, and then qualitative data were collected using open questionnaires. After analyzing the collected data using the phenomenology method, 11 factors were identified. Subsequently, a survey involving 17 faculty members from the accounting departments of Iranian public universities was conducted, and the Bayesian best-worst method was employed to rank these identified factors. Based on the results, the top 3 factors affecting innovation in accounting, in order of importance, include advances in information technology, changes in the business environment, and the level of financial knowledge and analytical skills of accountants. In order to improve the context of innovation in accounting, the results of this research suggest accountants should have general information about business and advances in information technology. They also, as the human capital of the innovation process in accounting, should continuously improve their level of financial knowledge and analytical skills.IntroductionIn recent years, the information technologies, such as cloud service models, big data, artificial intelligence, and blockchain are rapidly transforming the business environments and have raised concerns about the future of the accounting profession. Although these emerging technologies are still designed for the day-to-day work of accountants, they can significantly change the future work of accountants (Moll & Yigitbasioglu, 2019). It seems that in the face of the said technologies, the provision of accounting services, such as bookkeeping, preparing financial statements, preparing tax returns, and auditing, have all been subject to radical innovations (Bowles et al., 2020). According to the accounting literature, a new set of skills is necessary for accountants due to these emerging technologies. This is while job advertisements of Iranian companies (https://www.irantalent.com), still demand traditional job roles for accountants and instead, new job titles, such as fraud investigation specialist and senior data analyst have been emerging that can cover the newly defined job roles of accountants by literature. It seems that to reinforce the position of accountants in organizations, a change in accounting and in other words, the search for innovation in accounting is necessary.To address the lack of accounting literature in the field of innovation, the primary objective of this study is to identify and rank the factors that impact innovation in accounting by using qualitative methods, to initiate the expansion of innovative thinking and the creation of innovative ideas in accounting.MethodologyThis study used the phenomenology method to identify the factors affecting innovation in accounting. The accounting specialists were chosen as an informant using purposeful and snowball sampling methods. The twelve accounting specialists who participated in the research offered a wide range of services, including auditing, consulting, financial statement preparation, and tax accounting. Data collection was carried out mainly by means of an unstructured questionnaire supported by a telephone interview. Finally, by the use of Colaizzi’s method of data analysis, the factors affecting innovation in accounting were identified (Wirihana et al., 2018, p. 31).The Bayesian best-worst method was selected to rank the factors affecting innovation in accounting. The decision-makers were seventeen faculty members in the accounting department of Iranian public universities who had publications that transfer the concept of some sort of innovation in accounting. Bayesian best-worst method is based on pairwise comparison (Mohammadi & Rezaei, 2020). Pairwise comparison data from the decision-makers who participated in the research was collected through a standard questionnaire. Finally, using Python code for the chosen method, the factors affecting innovation in accounting were ranked.Results and DiscussionAccording to the results of Colaizzi’s method of data analysis, eleven factors were identified, and using the Bayesian best-worst method, the optimal weight of all factors was calculated. Table 1 presents the overall optimal weight and rank of factors affecting innovation in accounting. The findings indicate that the factors of advances in information technology (0.127806), changes in the business environment (0.12760311), and the level of financial knowledge and analytical skills of accountants (0.10951763) are respectively the most important factors. According to the optimal weight of all factors, it can be seen that none of the factors are irrelevant to innovation in accounting, because the weight of the least important factor is equal to 0.06665689. In fact, neither factor has an optimal weight lower than 0.065.ConclusionThe field of research into innovation in accounting is new, therefore this research generates new insight into the area. Among the practical implications, the study suggests that accountants consider environmental factors, such as advances in information technology and constantly update their knowledge and skills. It also suggests that they should improve their overall business knowledge by familiarizing themselves with different companies' operations and financial processes. Moreover, it suggests that they develop their analytical skills to be able to clarify the implications of decision-making results. Lastly, this study suggests that to achieve innovation in accounting, the conduct of research related to innovation and the cooperation of accountants can generate ideas to improve innovation in accounting.The study was qualitative in nature, as a result, this study cannot argue that the nature of innovation in accounting and the factors affecting it remain unchanged over time. Therefore, this study recommends more research in this field to contribute to a better understanding of innovation in accounting.
Financial Accounting
Zahra Eslami fard; Omid Pourheidari; Amirhossein Taebi naghandari
Abstract
Accounting is a reflection of the performance of economic entities, influenced by numerous factors. Culture is one of the most important factors influencing the development of accounting. This study explores how gender and social identity moderate the relationship between Islamic cultural values and ...
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Accounting is a reflection of the performance of economic entities, influenced by numerous factors. Culture is one of the most important factors influencing the development of accounting. This study explores how gender and social identity moderate the relationship between Islamic cultural values and the performance and attitudes within the auditing profession .This research follows an applied approach and employs a descriptive survey methodology. The study's population included all employees of the Audit Organization of Iran and doctoral students in accounting. A statistical sample of 384 individuals, composed of employees from the Iran Auditing Organization and accounting PhD students, was randomly selected based on Cochran’s formula for the year 1400. Data analysis was performed using the Structural Equation Modeling (SEM) approach with the Smart PLS software. The results indicated that there is a significant relationship between Islamic cultural values and employees' job performance and attitude. The study revealed that gender influences the relationship between Islamic cultural values and performance and attitudes within the auditing profession. However, social identity was found to have no significant impact on this relationship. Social identity has no effect on the relationship between cultural values of Islam and the function and attitude of the auditing profession. In conclusion, it is advisable to promote Islamic cultural values within the auditing profession to enhance ethical standards and professional competence.IntroductionThe increasing development and diversification of economic activities have led to the expansion of the capital market and the scope of activities of joint stock companies. Therefore, the duty and responsibility of professional auditors toward society and capital owners necessitates their adherence to a well-defined and consistent professional code of conduct, fostering acceptance, credibility, trust, and social respect (Turner, 2006).Career attitude is essentially an assessment of an individual's job, encapsulating their feelings, beliefs, and attachment to their occupation. Several variables influence the improvement of job attitudes, including age, education level, gender, work environment, years of service, competition, individual skills, job-specific skills, as well as the education and management approaches employed by audit supervisors (Kabir & Parvin, 2011).One of the most important factors influencing the development of accounting in any country is culture.Literature Review2.1. The effect of Islamic cultural values on the function and attitude of the auditing profession.Based on this discussion, the following hypotheses are presented:Hypothesis 1: There is a significant relationship between Islamic cultural values and the employees’ performance.Hypothesis 2: There is a significant relationship between Islamic cultural values and auditing staff’s job attitudeHypothesis 3: There is a significant relationship between the job attitude and performance of audit staff2.2 The effect of gender on the relationship between Islamic cultural values and the function and attitude of the auditing profession.Hypothesis 4: Gender affects the relationship between cultural values of Islam and auditing staff’s performance.Hypothesis 5: Gender affects the relationship between Islamic cultural values and auditing staff’s job attitude.Hypothesis 6: Gender affects the relationship between job attitude and audit staff performance.2.3. The effect of social identity on the relationship between Islamic cultural values and the function and attitude of the auditing profession.Hypothesis 7: Social identity affects the relationship between Islamic cultural values and auditing staff’s workHypothesis 8: Social identity affects the relationship between Islamic cultural values and auditing staff’s job attitude.Hypothesis 9: Social identity affects the relationship between job attitude and performance of audit staff.MethodologyThe research is applied and descriptive in nature, aiming to describe the effect of research variables during their implementation stages. The research population comprised employees of the Iran Auditing Organization and PhD students in auditing. We randomly selected a sample of 384 individuals based on Cochran's formula.To assess the fit of the measurement models, we employed criteria such as reliability and convergent validity. We evaluated questionnaire reliability using factor loading coefficients, Cronbach's alpha coefficient, and composite reliability. Data analysis involved the use of descriptive statistics as well as inferential statistics.ResultsThe purpose of this research was to examine the moderating role of gender and social identity in the relationship between Islamic cultural values and the function and attitude of the auditing profession. The results support the presence of a significant relationship between Islamic cultural values and auditor function, which aligns with the findings of Sayadi and Azizi (2016) and Hosseini and Babaei (2017). Additionally, the results reveal a significant connection between Islamic cultural values and auditor job attitudes, consistent with the findings of Sayadi and Azizi (2016) and Hosseini and Babaei (2017). Furthermore, the third hypothesis, suggesting a significant relationship between job attitude and audit staff performance, was confirmed, in accordance with Ali Fari et al.'s (2016) findings.The results indicate that gender significantly influences both Islamic cultural values and the performance of audit staff. Furthermore, gender has an effect on the relationship between Islamic cultural values and auditing staff’s job attitude. This result is inconsistent with the findings of Bani Mahd and Darvish (2015).The results also show that gender has an effect on the relationship between job attitude and performance of audit staff. This is consistent with the findings of Christensen et al. (2016), Sajjadi et al. (1401).Additionally, the results reveal that social identity does not affect the relationship between Islamic cultural values and auditing staff’s work. This is inconsistent with the findings of Badpa (2019).The results also show that social identity has no effect on the relationship between Islamic cultural values and auditing staff’s job attitude. This is in line with the findings of Ali Fari et al. (2016).Lastly, the results show that social identity has no effect on the relationship between job attitude and performance of audit staff. This is in line with the findings of Ali Fari et al. (2016). However, it is in contrast with the findings of Ebrahimzadeh et al. (1400) and Haqbin et al. (1401).AcknowledgmentsThe authors of the article express their appreciation and gratitude to the Islamic Azad University of Kerman branch.
Financial Accounting
Mohammad ali Karimi; Gholamreza Kordestani; . Kumars Biglar
Abstract
The public financial management system in developing countries faces ongoing challenges. These challenges include ensuring the compatibility of budget planning and discipline with macroeconomics, resource allocation in accordance with poverty reduction strategies, and effectively implementing programs ...
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The public financial management system in developing countries faces ongoing challenges. These challenges include ensuring the compatibility of budget planning and discipline with macroeconomics, resource allocation in accordance with poverty reduction strategies, and effectively implementing programs and activities while monitoring results. This research was conducted to identify the challenges of the public financial management system in the country. This qualitative study utilized the content analysis method to analyze data collected between 1400-1401. The required information was collected and analyzed through semi-structured interviews conducted with 15 experts to identify the challenges related to the country's public financial management systems. The challenges related to various public financial management sub-systems including the tax system, treasury system, asset and debt management system, budgeting system, accounting and financial reporting system, audit system, and performance evaluation system were identified in four elements, financial and non-financial resources, management and governance system, institutional framework, and support structures and in twelve dimensions including lack of financial resources, weak infrastructure and equipment, human resource problems, weakness in executive and operational processes, insufficient support of managers, influence and lobbying, lack of accountability, weak rules and standards, lack of transparency, weak training, non-implementation of accrual accounting, and weak performance budgeting. Identifying these challenges can provide a framework for improving the financial management system and help those involved in reforming the public financial management system.IntroductionStrong public financial management can reduce poverty, increase social justice, meet the information needs of stakeholders to assess accountability, and provide the basis for economic and social satisfaction, and contribute to sustainability in different dimensions. To achieve strong public financial management, there is a need to transform the public financial management subsystems.Studies have shown the necessity for reforming public finance management subsystems (Babajani, et al., 2012; Agha Mohammad et al., 2020; Nyamita, et al, 2015). To initiate reforms and strengthen the public financial management system, it is necessary to transition from traditional approaches to new ones that identify existing challenges and obstacles. By resolving them and building capacity, a foundation can be established for reforming the public financial management system. Therefore, the research question at hand is: What are the challenges facing public sector fiscal management?This research aims to introduce the literature related to the subject and explore the less-investigated issues associated with assessing financial management capacity and challenges within its sub-systems. In other words, the objective is to provide a deeper insight for responsible institutions and researchers to evaluate the capacity and challenges of public sector financial management.2-Literature ReviewThe research literature is presented in two parts: challenges related to public financial management sub-systems and assessing public financial management capacity.2-1: Challenges related to government financial management subsystems.Studies have shown that the tax system, treasury system, asset and debt management system, budgeting system, accounting and reporting system, audit system, and performance evaluation system are facing challenges.2-2: Assessing the capacity of public financial managementWhen assessing public financial management systems, the issue of capacity should be considered as crucial. Olander (2007) introduces four interdependent elements that need to be taken into account when assessing and developing public financial management capacity: management, resources, support structures, and the institutional framework. These elements represent the same challenges and limitations that must be identified and strengthened in the evaluation of public financial management. Doing so creates the necessary foundation for reforming and improving public financial management. MethodologyThis research employed a qualitative design. Data was collected through interviews, and the content analysis approach was utilized for analysis. A total of 15 individuals from the public sector were interviewed as part of the research. ResultsThe research results are presented in two parts.4-1) the codes extracted from the interviews are provided in Table.1, which consists of 7 main categories, 12 subcategories (dimensions), and a total of 70 concept elements (challenge factors).4-2) Research Concept Model.Drawing upon the research findings and recognizing that financial management comprises a comprehensive system of subsystems, the challenges associated with these subsystems also reflect the challenges of the overall financial management system. This is illustrated in Figure 1, which identifies 4 elements and 12 dimensions. DiscussionThe challenges related to public financial management subsystems, namely the tax system, the treasury system, the asset and debt management system, the budgeting system, the accounting and financial reporting system, the audit system, and the performance evaluation system can be grouped into four elements: financial and non-financial resources, management and governance system, institutional framework, and support structures. These challenges span across twelve dimensions, including: lack of financial resources, weak infrastructure and equipment, human resource problems, weakness in executive and operational processes, insufficient support of managers, influence and lobbying, lack of accountability, weak rules and standards, lack of transparency, weak training, non-implementation of accrual accounting, and weakness in performance budgeting. Identifying these challenges provides a framework for improving the financial management system and assists those involved in the reform of the public financial management system. ConclusionTo achieve the goals and capitalize on improvement opportunities, the financial management system must address several challenges. These challenges can be overcome through necessary reforms in the public financial management sub-systems, which require cooperation and coordination among executive bodies. The outcome of these reforms and the resolution of challenges will result in a robust public financial management system. This, in turn, will bring about stable financial income, resource discipline and efficiency, increased accountability and transparency, proper management of public funds, and ultimately good governance.However, it is important to acknowledge an important limitation: The breadth of dimensions and sub-systems related to the research subject. Limited access to experts and familiarity with all relevant topics presented a constraint. One potential solution to address the need for skilled human resources in the public sector is the establishment of a public financial management course. By developing the course curriculum in accordance with the actual needs of the public sector, this limitation can be mitigated.
Financial Accounting
mandana taheri; Mahtab Jafari
Abstract
Investor Sentiment often stem from held-up beliefs or information unrelated to stock value and can lead to extreme reactions or low reactions to good or bad news in stock valuation. In this study, the effect of two important policies of Earning sharing and debt policy in the company that can be investigated ...
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Investor Sentiment often stem from held-up beliefs or information unrelated to stock value and can lead to extreme reactions or low reactions to good or bad news in stock valuation. In this study, the effect of two important policies of Earning sharing and debt policy in the company that can be investigated on the behavior and inclinations of investors and then the Moderating effect of management Entrenchment on the relationship. To achieve the purpose of the research, four hypotheses were developed and data collected from 163 companies listed on the Tehran Stock Exchange during the years 2011 to 2021 were tested through regression models. The findings of this study showed that dividend policy increases investors' Sentiment but debt policy decreases investors' Sentiment. Management Entrenchment strengthens the positive relationship between dividend policy and investor sentiment. Therefore, during the dividend policy, the managers are of the shareholders' goals and want a higher dividend payment ratio. Management Entrenchment also reinforces the negative relationship between debt policy and investor sentiment. Therefore, risk-averse managers tend to use less debt, which is also a favorite of investors; because they invest in companies that have the least debt and their capital structure shows the importance of equity.
Financial Accounting
Akram Taftiyan; fatemeh mansuri mohammad abadi; akram abdollahi asad abaadi
Abstract
The current research has investigated the economic consequences of risk perception in annual reports; which is functional in terms of result, correlational and post-event in terms of descriptive method. The statistical population of this research includes all the companies admitted to the Tehran Stock ...
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The current research has investigated the economic consequences of risk perception in annual reports; which is functional in terms of result, correlational and post-event in terms of descriptive method. The statistical population of this research includes all the companies admitted to the Tehran Stock Exchange between 2008 and 2021, and 130 firms were selected as a statistical sample by systematic elimination (1820 observations).In this study, the accounting criteria of company value (rate of return on assets), the market criterion of company value (Tobin's Q) and the economic criterion of company value (added market value) were used to measure the economic outcome. In order to increase the degree of confidence in the results of hypothesis testing, static and dynamic panel data regression method was used. According to the findings of the research, in static modes and using the EViews software, it shows that there is a positive relationship between the market measure of the company's value (Tobin's Q) and the economic measure of the company's value (market value added) in both the static and dynamic modes with the sense of risk in annual reports. But there is no significant relationship between the accounting measure of company value (rate of return on assets) and the sense of risk in annual reports.
Financial Accounting
Seyed Hosein Sajadi; rahim bonabi ghadim
Abstract
Today, information competition space, as an external importance mechanism, affects the company's management system and stable performance and government ownership in both complementary and destructive aspects can affect this impact. The purpose of this study is to investigate the effect of government ...
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Today, information competition space, as an external importance mechanism, affects the company's management system and stable performance and government ownership in both complementary and destructive aspects can affect this impact. The purpose of this study is to investigate the effect of government ownership on the relationship between information competition and Earning persistenceof companies listed on the Tehran Stock Exchange.The statistical sample of the research includes 103 companies listed on the Tehran Stock Exchange for the period 2013 to 2020. In terms of purpose, the present study is an applied research using a post-event approach. For panel data, fixed-effect and random-effect models were used to estimate the research model using Eviews-8 software. The research results showed that information competition based on political relations and centralized institutional ownership increases Earning persistence and the interactive effect of government ownership with information competition further increases Earning persistence. That is, Government ownership and information competition are two complementary factors in achieving the goals of stakeholders.
Financial Accounting
Mohammad Arabmazar Yazdi; Vahid Mennati; Javad Roshanzamir
Abstract
Financial statement comparability improves the quality of financial information and the information environment, and enabling users to identify similarities and differences between different companies, and evaluating the performance of managers and supervising them. So, it is expected that increasing ...
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Financial statement comparability improves the quality of financial information and the information environment, and enabling users to identify similarities and differences between different companies, and evaluating the performance of managers and supervising them. So, it is expected that increasing the comparability of financial statements will limit the opportunism of managers. In this regard, in this study, the relationship between comparability of companies and debt maturity has been investigated. The data of the present study were collected using the financial information of 125 companies listed on the Tehran Stock Exchange in the period 2013 to 2019 (882 observation). To analyze the data, a multivariate linear regression model of the generalized least squares type by utilizing combined data was used. The results showed that there is a negative and significant relationship between the comparability of financial statements and the maturity of the company's debt. Therefore, it can be concluded that the Financial statement comparability plays an important role in aligning incentives in the company and by reducing information asymmetry and potential agency costs, can substitute for the use of short-term debt by serving as a corporate governance mechanism.
Financial Accounting
Karim Imani; Hossein Fakhari
Abstract
Audit task complexity, as one of the important and effective factors on the auditors' judgment and decision-making, is one of the controversial concepts in the audit field, which, due to its multidimensional nature, has led to many researches in the audit field. Despite the provision of individual indicators ...
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Audit task complexity, as one of the important and effective factors on the auditors' judgment and decision-making, is one of the controversial concepts in the audit field, which, due to its multidimensional nature, has led to many researches in the audit field. Despite the provision of individual indicators to measure audit task complexity in these studies, explaining a multidimensional model to measure of this fundamental concept in auditing is a problem that requires to research. It is expected that the explanation of such an index can lead to a better understanding of this concept and its dimensions and help auditors in planning audit task as well as ways to increase the quality of judgment and decision making. Accordingly, the current research purpose is to explain a model to measure for audit task complexity concept. For this purpose, information related to 128 companies in Tehran Stock Exchange during 2010-2019 was collected and tested through Partial Least Squares Structural Equation Modeling. Findings based on Constructive-Constructive measurement model and second-order Confirmatory Factor analysis showed that twenty-one factors effect on audit task complexity. Also, the results showed that audit task complexity is influenced by three dimensions of input, processing and output complexity. These findings, in addition to explaining the concept of audit task complexity, have helped to understand the effective factors and dimensions of this concept and can be useful in auditor's tasks planning and policy making and provide a more powerful tool to increase audit judgment quality.
Financial Accounting
Mohsen Imeni; Seyyed Mohammad Moshashaei
Abstract
The two approaches are more prominent in the accounting literature, accrual-based earnings management and manipulating the actual activities however, the present study is considered the third type of earnings management model, namely a classification shifting. The purpose of this study is to investigate ...
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The two approaches are more prominent in the accounting literature, accrual-based earnings management and manipulating the actual activities however, the present study is considered the third type of earnings management model, namely a classification shifting. The purpose of this study is to investigate the effect of constraints on earnings management strategies on the application of shifting strategy in earnings classification in the Iranian capital market. The research sample consisted of 114 firms from 2013 to 2021 (1026 observation). Logistic regression models have been used to test research hypothesis. The results of the study show that financial health, institutional shareholders, audit firm size and market share have a negative and significant effect on the classification shifting. Also, the operating cycle has a positive and significant effect on the c classification shifting; and its tenure does not have a significant effect on the classification shifting. Additional tests indicated large companies have a greater incentive to do classification shifting (a form of earnings management) compared to small companies, because they have greater political costs.
Financial Accounting
Mahshid Shahrzadi; Darioush Foroughi
Abstract
The Aim of this study is to introduce the left tail risk as a driver for creating idiosyncratic volatility and explainer the negative returns due to high unsystematic volatility. In addition, the present study is trying to determine how the idiosyncratic volatility puzzle occurs. In this study, univariate ...
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The Aim of this study is to introduce the left tail risk as a driver for creating idiosyncratic volatility and explainer the negative returns due to high unsystematic volatility. In addition, the present study is trying to determine how the idiosyncratic volatility puzzle occurs. In this study, univariate and bivariate portfolio analysis as well as Fama and Macbeth (1973) regression have been used. For this purpose, the information of Tehran stock exchange and Iran fara bourse companies during the years 1384 to 1398 has been used. The results of this study indicate the existence of the idiosyncratic volatility puzzle (the low (high) returns of high (low) idiosyncratic volatility stocks) and left tail risk anomaly (the low (high) returns of high (low) left tail risk) in the research sample. The idiosyncratic volatility puzzle (the low (high) returns of high (low) idiosyncratic volatility stocks) is no longer detected when idiosyncratic volatility-sorted portfolios are neutralized to left tail risk, regression control for left tail risk and factor models include a left tail risk factor. The left tail risk plays the important role to explain idiosyncratic volatility puzzle (the low returns of high idiosyncratic volatility stocks) and the reason for this explanation is the falling stock price pressure with high left-tail risk on stocks with high unsystematic volatility.
Financial Accounting
Abbas Aflatooni; Zahra Nikbakht; Kefsan Mansouri
Abstract
The existence of firms' excess cash causes resources to stagnate and, cash deficit causes loss of investment opportunities. Therefore, firms generally try to maintain an optimal level of cash holdings. In addition, firms attempt to quickly correct any deviations from the optimal level of cash holdings. ...
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The existence of firms' excess cash causes resources to stagnate and, cash deficit causes loss of investment opportunities. Therefore, firms generally try to maintain an optimal level of cash holdings. In addition, firms attempt to quickly correct any deviations from the optimal level of cash holdings. The level of cash holdings and the speed of correcting the gap between the actual and the optimal level of cash holdings depend on several factors. The purpose of this study is to investigate the effect of the firm's business strategies (defenders and prospectors) on the level of cash holding and its speed of adjustment. In this regard, the data of 120 firms listed on the Tehran Stock Exchange (TSE) during 2013-2020 (960 firm-years) have been used. The static models are estimated using ordinary least squares (OLS) estimator and, the system generalized method of moments estimator (GMM) is used to estimate dynamic models. The results show that the prospectors have a smaller cash holdings ratio than defenders, and also, the prospectors have lower cash holdings speed of adjustment than defenders. The results of supplementary tests that confirm the research's main findings are consistent with the predictions made in trade-off theory.
Financial Accounting
Narges Hamidian; Golnaz Eshaghi
Abstract
The relevance and usefulness of accounting information can be measured by the simultaneous relationship between accounting information, returns or stock market prices. The Comparability of accounting information, as a qualitative feature of information, increases the value relevance of accounting information. ...
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The relevance and usefulness of accounting information can be measured by the simultaneous relationship between accounting information, returns or stock market prices. The Comparability of accounting information, as a qualitative feature of information, increases the value relevance of accounting information. Also opacity in financial reporting through the corporate financial system increases stock volatility and, as a result, increases investment risk and investor distrust. Accordingly, the purpose of this study is the effect of comparability of financial statements and opacity in financial reporting on the value relevance between earnings and book value per share. Accordingly, a sample of 137 companies was selected from the companies listed on the Tehran Stock Exchange during the years 2013 to 2019 and to test the hypotheses, a multivariate regression model using the panel data method was used. The results showed that earnings and book value per share have a value relevance and the comparability of financial statements increases the value relevance of earnings per share. But contrary to the literature, comparability reduces the value relevance of book value per share. On the other hand, the opacity of financial reporting reduces the value relevance of book value per share due to comparability of financial statements, but does not affect the value relevance of earnings per share due to comparability.
Financial Accounting
Reza Taghizadeh; Mohammad Abdzadeh Kanafi; alieh ghermezi
Abstract
This study examines earnings quality in the relations network of the board of directors of companies in the Iranian stock market in the period 2011 to 2020. This study has a quantitative approach that is post-event in terms of implementation. Furthermore, it is based on graphic techniques on graph theory. ...
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This study examines earnings quality in the relations network of the board of directors of companies in the Iranian stock market in the period 2011 to 2020. This study has a quantitative approach that is post-event in terms of implementation. Furthermore, it is based on graphic techniques on graph theory. Network analysis and regression analysis were used to conduct research tests. Findings showed that in the communication network of companies, some of them are in a better position and have more access and effectiveness. Better location can lead to easier access to information and resources faster. Also, the results of testing the hypotheses showed that there is no significant relationship between the betweenness centrality, and earnings quality. But there is a significant negative relationship between the degree centrality and earnings quality and a significant positive relationship between the closeness centrality, and the earnings quality. In other words, it can be said that the position in the structure of relationships can somehow affect earnings quality of companies.
Financial Accounting
Mohammad Khatiri; Ali Ghasemi; Mahtab Darvishtabar Ahmad Chali; Omid Mehri Namak Avarani
Abstract
The present study investigates the effect of ownership structure in adjusting relationship between related party transactions and unexpected audit fees in loss-making companies. In this way and order to achieve research objectives; Data of 71 companies were extracted for a ten-year period from the beginning ...
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The present study investigates the effect of ownership structure in adjusting relationship between related party transactions and unexpected audit fees in loss-making companies. In this way and order to achieve research objectives; Data of 71 companies were extracted for a ten-year period from the beginning of 2010 to the end of 2019, the research variables were calculated and the necessary statistical tests were performed. The method of this research is descriptive-correlational and its design is experimental using post-event approach. The Results Findings There is a positive and significant relationship between transactions with related parties and unexpected audit fees, and the independence of board of directors and duality of CEO's role have a significant effect on this relationship. On the other hand, the size of the board and CEO stability; They had no significant effect on this relationship. Conclusion say Transactions with related parties increase the unexpected costs of auditing and the independence of the board of directors and the duality of the role of the CEO reduce the relationship between transactions with related parties and unexpected auditing costs.
Financial Accounting
Iraj Davanipour; Ghasem Blue; Maghsoud Amiri
Abstract
This research aims to present a pattern for measuring the quality of financial statements. To achieve this aim, firstly by reviewing the literature and theoretical background and also running an expert interview, a collection of indexes related to the quality of financial statements are identified, and ...
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This research aims to present a pattern for measuring the quality of financial statements. To achieve this aim, firstly by reviewing the literature and theoretical background and also running an expert interview, a collection of indexes related to the quality of financial statements are identified, and then by using a questionnaire and performing Fuzzy Delphi method and confirmatory factor analysis we have identified indexes which have a significant effect on the quality of financial statements. After that, using the analytic network process, we have measured the relative weight of each of those indexes (7 indexes) regarding their effect on the quality of financial statements. Lastly, by measuring each of the indexes, and then computing the weighted average of measurements of all indexes (7 indexes), the measure of the quality of financial statements is computed. For assessing the validity of the presented pattern, we have used a regression model for 57 companies listed in Tehran Exchange for years from 1394 to 1396. We have shown that consistent with the literature, there is a significant negative relationship between the quality of financial statements and cost of equity. This relationship proves that the presented pattern has enough validity for measuring the quality of financial statements. Results of this research have shown that average of measures of quality of financial statements for 57 selected firms during years 1394 to 1396 are improved.
Financial Accounting
Mosa Bozorg Asl; mohamad marfo; mahdi mahannejad
Abstract
Linguistic features of information provided by business unit management could facilitate the goals of the transmission of economic facts. In recent years, these characteristics have always been considered in research in the field of accounting and behavioral finance. Therefore, this study seeks to examine ...
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Linguistic features of information provided by business unit management could facilitate the goals of the transmission of economic facts. In recent years, these characteristics have always been considered in research in the field of accounting and behavioral finance. Therefore, this study seeks to examine the effect of financial reporting tone on audit fees. The sample consists of 63 companies listed in Tehran Stock Exchange for the period from 2012 to 2019. Financial reporting tone is measured using the model introduced by Muhammad et al (2019). Also, a natural logarithm is used to measure audit fees. The data are analyzed and the hypotheses are tested based on the multivariate regression model and panel data. The findings show that financial reporting tone has a significant negative effect on audit fees. In other words, if the financial reporting tone conveys an optimistic tone, the audit fee will be less. Results indicate that financial reporting tone reflects factors that auditors consider in assessing audit risk.