Vahid Mennati; Okhtharoon Alipour
Abstract
Objectivity is one of the four fundamental principles of internal auditors Code of Ethics. In 2010, The Institute of Internal Auditors (IIA) introduced the Value Proposition and objectivity is one of the three core elements of it. Also, according to Auditing Standard No. 610, objectivity is one of the ...
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Objectivity is one of the four fundamental principles of internal auditors Code of Ethics. In 2010, The Institute of Internal Auditors (IIA) introduced the Value Proposition and objectivity is one of the three core elements of it. Also, according to Auditing Standard No. 610, objectivity is one of the main components of internal auditing. Use of internal Audit Function (IAF) as a Management Training Ground (MTG) is in companies that internal auditors are promoted to executive positions. This can impair their objectivity and affect the reliance of independent auditors on their work. So the purpose of this study is to investigate the level of the External Auditor’s Reliance Decision on the Internal Auditors Function as a MTG. The purpose of this study is to investigate the reliance of external auditors on the work of internal auditors according to the strategy of MTG. Participants of this study are External auditors including partners, managers, senior supervisors, and senior auditors of Iranian audit firms. In this survey, 100 questionnaires were collected. The results of the study show that external auditors perceive internal auditors employed in an IAF used as a MTG to be less objective. The results also showed that external auditors perceive the competence and due professional care of IAFs used as a MTG less than other IAFs.
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.
Mohammad Ali Bagherpour Velashani; Hossein Etemadi; Mahdi Omidfar
Abstract
The purpose of this research is to examine the relationship between thecorporate governance characteristics and accounting restatements due torapid growth of restatements in the world as well as the Iranian capitalmarket. Researchers believe that restatement is a sign of low quality offinancial reporting ...
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The purpose of this research is to examine the relationship between thecorporate governance characteristics and accounting restatements due torapid growth of restatements in the world as well as the Iranian capitalmarket. Researchers believe that restatement is a sign of low quality offinancial reporting by the companies. For doing so, similar to prior studiesand by consideration of the Iranian context a set of different corporategovernance characteristics including power of CEO, CEO changes, blockholders, largest shareholder, auditor type, auditor industry specialization,auditor changes, and finally capital structure are considered. In addition, tocontrol the possible effects of other factors, which could potentially affectfirms'''' restatement decisions, 10 new variables were added to the model.These control variables include return on assets, sales growth, operating cashflow, liquidity ratio, prior year performance, equity financing, debtfinancing, firm size, year, and industry type. The final research sampleincludes 999 observations of the Tehran Stock Exchange (TSE) listedcompanies for the period 2004-2009. The results indicate that CEO changes,auditor changes, auditor industry specialization, auditor size and largestshareholder as well as some financial characteristics such as operating cashflows ratio, liquidity ratio, and firm size are associated with the restatementsof the accounting income. Therefore, the findings support the hypothesis thatcorporate governance mechanisms can improve the quality of financialreporting.
Ali Saghafi; Saber Sheri
Volume 2, Issue 8 , January 2005, , Pages 87-120
Abstract
This Study is aimed at examining the usefulness of financial statements information. In particular, usefulness criteria of financial statements depend upon relevance and predictive ability.
So far many models and hypotheses have been developed in order to evaluate and predict stock return through different ...
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This Study is aimed at examining the usefulness of financial statements information. In particular, usefulness criteria of financial statements depend upon relevance and predictive ability.
So far many models and hypotheses have been developed in order to evaluate and predict stock return through different viewpoints. A large number of empirical accounting researches have been done in order to achieve this goal. Different groups of investors and decision makers are interested in evaluation and prediction of Stock return.
This guided research procedure is different from the mere statistical searches because, we have chosen the fundamental variables through theory and famous models. We developed Samuel Stewart’s model and ended up selecting 42 independent Variables (fundamentals). Eighty two listed companies were selected from Tehran Stock Exchange. The selection was done from various industries.
Regression cross-sectional models were developed for the firms within the years 1374 to 1380; 1378 to 1380 and, for each single year of the research period.
We constructed the following hypotheses:
1- The financial Statements information has ability to predict stock return.
2- Using Accounting models for selected industries, industries, increase the predictive ability of financial statements information.
3- Using models based upon sign of variables increase the predictive ability of financial statements information.
Conclusion:
The concluding results of this study, confirms the predictive ability of accounting information. Variables such as rate of return on assets (ROA), rate of return on investments (ROI), growth of sales to total assets ratio (GSTTA), growth of net income to sales ratio (GNITS) and financial expenses to sales (FEXTS), have had the most influence among 9 regressed models, in prediction of stock return.
The performance of models in short run was better than long run. Using models for special selected industries (drug and chemical; mineral and cement) improved the predictive ability of our selected variables. But the models based on sign of variables did not increase the predictive ability of the models.
Javad Shekarkhah Shekarkhah; Keivan Ghasedi Dizaji
Abstract
In this study we evaluate the effects of macroeconomic factors on managements financing decision. Inflation rate, exchange rate, economic growth, interest rate and the amount of bank credits are considered as proxies of macroeconomic factors, furthermore the ratio of debt to equity ...
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In this study we evaluate the effects of macroeconomic factors on managements financing decision. Inflation rate, exchange rate, economic growth, interest rate and the amount of bank credits are considered as proxies of macroeconomic factors, furthermore the ratio of debt to equity is appointed as the proxy of managements financing decision. We gather the required data from published information by listed companies in Tehran stock exchange during the period of 1375 to 1390. In order to analyze the data we apply multiple variableregressions based on panel data. Our results show that inflation rate, economic growth rate and interest rate have significant negative relation with managements financing decision. In contrast, our findings show that exchange rate and amount of bank credits have no significant relation with managements financing decision.
Accounting report
maryam yokhanehalghyani; jamal bahrisales; Saeid Jabbarzadeh Kangarluei; Akbar Zavari Rezaei
Abstract
Companies sometimes file fraudulent financial statements for tax fraud. The purpose of this study is to combine data mining tools and artificial intelligence with meta-heuristic algorithms to explain and optimize a model for detecting fraud and tax evasion by using the capacity of financial reporting. ...
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Companies sometimes file fraudulent financial statements for tax fraud. The purpose of this study is to combine data mining tools and artificial intelligence with meta-heuristic algorithms to explain and optimize a model for detecting fraud and tax evasion by using the capacity of financial reporting. Qualitative and quantitative indicators of financial reports of 1056 year- companies in the Tehran Stock Exchange in the period of 2006 to 2019 were studied in the classical approach and used to expand the model in the Adaptive Neural-Fuzzy Inference System. Findings show that in optimization with genetic algorithm, particle swarm optimization algorithm and differential evolution algorithm, the most efficient model is obtained by particle swarm algorithm, which is the most efficient algorithm in the study with experimental and educational data. The results indicate that the application of different optimization algorithms in the data mining approach increases the predictive power of the fraudulent financial-tax reporting identification model
Volume 11, Issue 42 , July 2014, , Pages 89-114
Abstract
Managers venture to voluntary disclosure to inform investors about firms’ future point of views, goals and strategies. Financial and non-financial voluntary information reduce information asymmetry, increase stock liquidity and improve financial stability. In this research the relation of voluntary ...
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Managers venture to voluntary disclosure to inform investors about firms’ future point of views, goals and strategies. Financial and non-financial voluntary information reduce information asymmetry, increase stock liquidity and improve financial stability. In this research the relation of voluntary disclosure level and information asymmetry of listed companies of Tehran Stock Exchange is investigated. Botosan (1997) check list which has been adjusted by kashanipour and et al. (2009) was utilized to measure voluntary disclosure level. The check list consists of 71 indices through six section of background information, the summery of historical results, Key Non-Financial Statistics, Segments Information, Projected Information and Management Discussion and Analysis. Moreover, information asymmetry variable is measured by using Venkatash and Chiang (1986) model. To test research hypotheses multivariate regression with panel data is utilized. The results show that there is no significant relation between voluntary disclosure level and information asymmetry of 122 listed companies of Tehran Stock Exchange during 2003-2011. Keywords: Voluntary disclosure level, Information asymmetry, Liquidity, Capital market. Managers venture to voluntary disclosure to inform investors about firms’ future point of views, goals and strategies. Financial and non-financial voluntary information reduce information asymmetry, increase stock liquidity and improve financial stability. In this research the relation of voluntary disclosure level and information asymmetry of listed companies of Tehran Stock Exchange is investigated. Botosan (1997) check list which has been adjusted by kashanipour and et al. (2009) was utilized to measure voluntary disclosure level. The check list consists of 71 indices through six section of background information, the summery of historical results, Key Non-Financial Statistics, Segments Information, Projected Information and Management Discussion and Analysis. Moreover, information asymmetry variable is measured by using Venkatash and Chiang (1986) model. To test research hypotheses multivariate regression with panel data is utilized. The results show that there is no significant relation between voluntary disclosure level and information asymmetry of 122 listed companies of Tehran Stock Exchange during 2003-2011. Keywords: Voluntary disclosure level, Information asymmetry, Liquidity, Capital market. In this research effect of extreme and moderate cash flows in explanatory power of model when the earnings are extreme is investigated through the extended version of Easton and Harris model. In this study in period of 1385 to 1391 we had 665 firm-year observations that after the removal of outliers we reach to 594 observations. We use OLS regression that in this regression we confront with unbalanced panel data with random effect. For classification of earnings and cash flows to extreme and moderate we use quintiles. Likewise, for comparing explanatory power of the models we use Cramer's (1987) Z-statistic. After all, with attention to statistic of this test we conclude that moderate cash flows relative to extreme cash flows when the earnings are extreme have effectson explanatory power. Keywords: Extreme Earnings, Moderate and Extreme Cash Flows from operation, Explanatory Power. In this research effect of extreme and moderate cash flows in explanatory power of model when the earnings are extreme is investigated through the extended version of Easton and Harris model. In this study in period of 1385 to 1391 we had 665 firm-year observations that after the removal of outliers we reach to 594 observations. We use OLS regression that in this regression we confront with unbalanced panel data with random effect. For classification of earnings and cash flows to extreme and moderate we use quintiles. Likewise, for comparing explanatory power of the models we use Cramer's (1987) Z-statistic. After all, with attention to statistic of this test we conclude that moderate cash flows relative to extreme cash flows when the earnings are extreme have effectson explanatory power. Keywords: Extreme Earnings, Moderate and Extreme Cash Flows from operation, Explanatory Power.
Ahmad Bahrami; Mohsen Dastgir
Volume 11, Issue 43 , October 2014, , Pages 89-110
Abstract
The aim of this research is to investigate the explanatory power of asset turnover (ATO)/Profit Margin (PM) model in determining of changes of operating income of listed companies in Tehran Stock Exchange. Dependent variable is ratio of changes of operating income to net operating assets in forward year ...
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The aim of this research is to investigate the explanatory power of asset turnover (ATO)/Profit Margin (PM) model in determining of changes of operating income of listed companies in Tehran Stock Exchange. Dependent variable is ratio of changes of operating income to net operating assets in forward year that is used to measure the information content of ATO/PM model in identifying earnings management. In this study, we propose a simple diagnostic of earnings management that relies on the widely held notion underlying DuPont analysis that sales is a fundamental driver of a firm’s investment and income, and that net operating assets on the balance sheet and net operating income on the income statement should vary directly with sales. Moreover, we note that changes in ATO and PM in opposite directions could signal earnings management. Independent variables contain upward and downward EM based on ATO/PM model. Also, operating income to net operating assets ratio in current year, changes of operating income to net operating assets ratio in current year, to net operating assets to sale ratio in current year, changes of net operating assets to sale ratio in current year, changes of ATO, changes of PM, components of managed accrual items based on abnormal accrual items (Jones adjusted Model), and market value to book value were applied as control variables. Statistical population contains 133 companies during 2004-2011. The panel/pooled regression models exerted to testify research hypotheses.
Findings indicate that ATO/PM model compared with Jones adjusted abnormal accruals items model is of less relative information content in identifying earnings management.
Javad Rezazadeh; Kamal Zareie Moravvej
Volume 5, Issue 20 , January 2008, , Pages 89-105
Abstract
The purpose of this study is examining the impact of worldwide known factors on auditor changes in Iranian corporations. For the study, the population of interest comprises all companies listed on the Tehran Stock Exchange (TSE). The sample comprises 37 auditor-change TSE companies and 37 non-auditor-change ...
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The purpose of this study is examining the impact of worldwide known factors on auditor changes in Iranian corporations. For the study, the population of interest comprises all companies listed on the Tehran Stock Exchange (TSE). The sample comprises 37 auditor-change TSE companies and 37 non-auditor-change TSE companies. Logistic analysis is performed on the sample data. The findings indicate that audit fee, audit quality, change in management composition, and firm size are significantly influencing variables on auditor changes. Logistic multivariate analysis indicate that factors such as audit fee, audit opinion, change in management composition, and firm size can be used to establish a model to predict auditor changes.
Reza Hesarzadeh; Hossein Etemadi; Adel Azar; Ali Rahmani
Abstract
According to the information perspectives of accounting, the main function of accounting is to provide information and to reduce uncertainty. Therefore, accounting capacity of reducing uncertainty determines the accounting quality (AQ) and so, we are attempting to find the best combinations ...
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According to the information perspectives of accounting, the main function of accounting is to provide information and to reduce uncertainty. Therefore, accounting capacity of reducing uncertainty determines the accounting quality (AQ) and so, we are attempting to find the best combinations of AQ Proxies whose trading off can reduce uncertainty. The purpose of this paper is to explore how AQ Proxies could reduce uncertainty. Tree analysis (structures of if and then) is employed since this analysis could empirically address boththe trade-off of Proxies and the importance of each measure in reducing uncertainty. Also, traditional statistics tests are employed. The Decision Tree analysis creates a tree-based classification model. Our findings suggest that there are at least three interaction paths through which accounting quality Proxies could reduce uncertainty. In contrast to previous researches which have found it difficult to investigate the trade-offs of AQ Proxies; this paper shows that it is possible to address it and in this way, it could prepare a number ofrules of thumb to reduce uncertainty through AQ Proxies. These findings have different implications for policy makers, audit committees, and investors.
darioush foroughi; Hadi Amiri; Seyed Mohammad Alsharef
Abstract
The purpose of the study is to investigate the influence of accruals on future assets’ returns and future stocks returns. Due to their estimating nature, accruals are less stable relative to cash flows; therefore, they are more influential on returns; however, financial distress may increase or ...
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The purpose of the study is to investigate the influence of accruals on future assets’ returns and future stocks returns. Due to their estimating nature, accruals are less stable relative to cash flows; therefore, they are more influential on returns; however, financial distress may increase or decrease the influence of accruals on future returns. The study sample includes 117 companies incorporated in Tehran Stock Exchange between 2006 and 2015. The findings of this study reveal that the influence of accruals on the future returns of assets in the companies suffering financial distress is less which is owing to more persistency of the accruals (much real estimations) in the companies struggling with financial distress. Furthermore, the influence of accruals on the future returns of the stocks in the companies suffering financial distress is less which is due to less abnormality of accruals (less mispricing) in companies suffering financial distress compared to companies with non-financial distress. Key words: Financial Distress, Abnormality of Accruals, Persistence Argument, Assets Returns, Stock Returns.
Hassan Ali Sinaei; Farzad Ahmadi
Volume 1, Issue 3 , October 2003, , Pages 95-125
Abstract
The aim of this research is to find any relationship between productivity and profitability indexes; the fact that whether productivity level movement affects the profit movement or not? And if there is any relationship between them, how is it?
To Study the subject , among population of private and ...
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The aim of this research is to find any relationship between productivity and profitability indexes; the fact that whether productivity level movement affects the profit movement or not? And if there is any relationship between them, how is it?
To Study the subject , among population of private and public companies of foodstuffs and drinkables groups - which had been accepted in Tehran stock exchange - a sample of 27 members was selected by random method; they were studied from 1375 (the beginning of financial year) to 1374 (the end of financial period).
In this research, profitability indexes determine the profitability of the firm unit. These indexes are consisting of sale return ratio, return on assets ratio and equities return ratio.
Necessary information collected from basic statements of affairs enclosure notes, meeting reports and documents of other companies in Tehran Stock exchange. Finally all of them were analyzed.
According to this information, productivity indexes of labor forces and capital - based on the value added approach – was determined as dependent variable.
In the next step, Profitability ratios of companies in the sample was determined as dependent variable and the relationship between dependent and independent variables was determined by statistical methods of coefficient of correlation.
M. Arab Mazar Yazdy; A. Massihabadee
Volume 2, Issue 5 , April 2004, , Pages 95-130
Abstract
The purpose of this research is to study the effects of accounting information on investors ' perception, judgment, and decision making processes. A cognitive process conceptual model which is based on covariance structural modeling (casual modeling) was used to realize the goal. The main question in ...
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The purpose of this research is to study the effects of accounting information on investors ' perception, judgment, and decision making processes. A cognitive process conceptual model which is based on covariance structural modeling (casual modeling) was used to realize the goal. The main question in this research is: whether all Investors’ perception, judgment and decision making processes, in relation with information assessment and accuracy and soundness decision choices, is the same when they are presented with financial information? Based upon Meyers Briggs Type Indicator (MBTI) subjects were placed in one of two main groups, Data Driven and concept Driven. They were managers and high experts of investment companies, and they decided about investing in real corporations after assessment and judgment on those corporations' financial information.
In this research extracted principles of psychology have consolidated with methodology outputs in psychometric, econometric, and statistical techniques in a covariance structural modeling framework. Findings suggest that accounting information effect on Data Driven and concept Driven Investors' perception and judgment, and perception and judgment is an important determinant in investment or non-investment. On the other hand , Investors' perceptual, judgmental and decision choices are not the same, Data-Driven investors make better decisions and concept-Driven decision makers evaluate financial information (financial ratios ) more positively.
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.
Mahdi Moradzadehfard; Maryam Farajzadeh; Shima Karami; Morteza Adlzadeh
Volume 11, Issue 44 , March 2015, , Pages 97-116
Abstract
The purpose of this research is to examine both the relationship between accounting conservatism and level of investment under the need or no need of financing conditions and the impact of ultimate ownership on this association. The statistical society of the present research contains 103 companies selecting ...
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The purpose of this research is to examine both the relationship between accounting conservatism and level of investment under the need or no need of financing conditions and the impact of ultimate ownership on this association. The statistical society of the present research contains 103 companies selecting from all companies listed in Tehran Stock Exchange using removal method over the time span of 2006-2010. Combined data method with fixed effect has been used in order to test the research hypothesis. The result depicts that the association between conservatism and investment is significantly negative when a firm do not need external financing. Nonetheless, this association is significantly positive in companies which need external financing. Furthermore, we find that the relationship between conservatism and investment in the companies whose ultimate ownerships controller is governmental or semi governmental firms is significantly negative. Thus, when the agency problem is enhancing, conservatism acts as a mechanism to decrease this problem and engenders reduction in investment cost
M. Araab Mazar Yazdi; R. Taher Khani
Volume 8, Issue 29 , April 2010, , Pages 97-113
Abstract
As a functional and economical procedure, the change of firm ownership into generalization, leads to a growth in firm fund and as a result, an Expansion in its commercial operation. The need for great funds in commercial units and the formation of corporation as a result, leaded to separation of ownership ...
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As a functional and economical procedure, the change of firm ownership into generalization, leads to a growth in firm fund and as a result, an Expansion in its commercial operation. The need for great funds in commercial units and the formation of corporation as a result, leaded to separation of ownership from manager firms, and so to a conflict among the managers and the owners. In recent years, corporate governance-including a network of connections among stockholders, managers, accountants, and other beneficiaries- has been posed as a decreasing factor of the great discrepancy among stockholders and also the segregation of ownership from commercial unit control. One of the most important factors which contribute to the control of management relationship is the board of director and its composition. As a result, it is of crucial importance to survey factors related to board composition and its effect on the firm operation.
The locative domain of this survey is the collection of listed Companies in Tehran Stock Exchange and its temporal domain lies between year1382 till 1386. On the basis of this, the chosen samples include 130 firms.
Considered questions in this research have been posed as six hypotheses. The result of hypothesis testing shows that corporate governance variables including the number of members of board, the number of its non-executive members and the number of major shareholders have no effect on the return on equity (ROE), but on the other hand, this variables affect Tobin’s. The results show that the number of board members has a negative and at the same time negligible effect on Tobin’s, but the nonexecutive members of board and the number of majority shareholders have positive and also insignificant effect on Tobin’s.
saeid ghorbani
Accounting and various aspects of finance
Hassan Badri Gamchi; Mohammad Hassani; Ahmad Yaghoobnezhad; Ehsan Rahmaninia
Abstract
This paper analyzed the consequences of financial reporting convergence towards integrated reporting in Iran's capital market focusing on agency cost and cost of equity capital. In order to measure the financial reporting convergence towards integrated reporting, a checklist has been used which designed ...
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This paper analyzed the consequences of financial reporting convergence towards integrated reporting in Iran's capital market focusing on agency cost and cost of equity capital. In order to measure the financial reporting convergence towards integrated reporting, a checklist has been used which designed based on the international integrated reporting framework. The agency cost measured using the efficiency criterion based on the ratio of operational expenses to operational revenues. The cost of equity capital estimated based on the expected rate of return using the capital assets pricing model. The research population includes 144 firms listed in the Tehran Securities & Exchange over March 2016 till March 2021. Multivariable regression models were used to test research hypotheses. The findings showed that increase in convergence level of firms’ financial reporting with integrated reporting framework has reduced agency cost and cost of equity capital. These findings suggested that focusing on the benefits of integrated reporting through transparency and completeness of information disclosure has weakened agency conflicts and reduced agency costs. In addition, integrated reporting has reduced the cost of capital in financing decisions due to the adoption of sustainable business model from integrated thinking and the reduction of information asymmetry due to greater transparency for more informed forecasting.
Hamid khaleghi Moghadam; Abdol Mehdi Ansari
Volume 4, Issue 14 , July 2006, , Pages 99-132
Abstract
Valuation theories and models have evolved over time from the very simple present value formulation to more complex relationships. But the causality between accounting numbers and the value of the firm has not been succinctly developed investors, investment advisors, and analysts continue to utilize ...
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Valuation theories and models have evolved over time from the very simple present value formulation to more complex relationships. But the causality between accounting numbers and the value of the firm has not been succinctly developed investors, investment advisors, and analysts continue to utilize accounting numbers as a subset of the information used in forming expectations about the probability distribution of rates of return.
Finally, to the extent that investment analysts and advisors try to beat the market, their Utilization Of information in making expectations can be colored by their personal, individualistic attributes. One of these attributes is the phenomenon of functional fixation.
In psychology, functional fixation refers to a phenomenon of most human behavior: "the individual attaches a meaning to a title or an object and is unable to see alternative meanings or uses.
In applying this concept to accounting, they extrapolated that: "if the outputs from different accounting methods are called by the same name, such as profit, cost, etc..., people who do not understand accounting well, tent to neglect the fact that alternative methods may have been used to prepare the outputs. In such a case, a change in the accounting process clearly influences the decisions.
"Functional fixation hypothesis in accounting, that is, investors have a value from securities in mind which is obtained from some certain accounting figures, such as earning per share, without paying attention to how it is calculated, or what is its information content. On the other hand, investors have functional fixation on accounting figures, not on its information content.
The operational testing of the central hypothesis is achieved by testing a series of sub-hypotheses which are tailored to fit the type of data generated by the experiment.
All of the given tests pointed up this matter that, respondents in the sample (the statistical sample was chosen from received and valid answers of 38 answer sheets) have classified the firm which has changed the method of the weighted average (its reported profit is decreased and its cash inflow is increased), much lower than its similar firm which has continued Fifo method.
Yahya Hassas Yeganeh; Ali Jafari
Volume 3, Issue 10 , July 2005, , Pages 103-125
Abstract
Audit quality is one of the fundamental discussions in auditing theory and practice. The goal of this research can be classified in five categories: Fist, identification of significant factors in audited quality through library research of survey. Second, collecting and analyzing identified factors among ...
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Audit quality is one of the fundamental discussions in auditing theory and practice. The goal of this research can be classified in five categories: Fist, identification of significant factors in audited quality through library research of survey. Second, collecting and analyzing identified factors among experts in the field and each factor place in auditing in IACPA by on Delphi survey. Third, analyzing of IACPA's actual audit quality by reviewing audit of financial statements of audited firms. Fourth, comparison of perceived audit quality with actual audit quality. Fifth, suggestion for important of the auditing to certified auditors. The result of the research shows that the seven variable: ( I) specialization (2) efficiency (3) discover of misstatement (4) Regulatory Mechanism (5) conflict of interest (6) Free Market Approach (7) auditor size, arc agreed upon by most experts in the field.
Also assessment of the expert in the research shows that the seven key items that are significant in audit quality are rarely adhered to in auditing by certificated auditors. Analyze of research in auditing reports of the financial statement belonging to 135 companies in the years 1381, 1383 done by IACPA shows that the experts are not efficiency.
Jafar Babajani; Mohammad Javad Moradmand
Volume 5, Issue 17 , April 2007, , Pages 105-128
Abstract
In this research the function of the enforcement 272 clause of the direct taxes law by the CPAs for the examination of the existing meaningful difference between the recognized income taxable by the officers of the fiscal affair organization and the ...
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In this research the function of the enforcement 272 clause of the direct taxes law by the CPAs for the examination of the existing meaningful difference between the recognized income taxable by the officers of the fiscal affair organization and the recognized income taxable by the CPAs, has been evaluated.
This subject has been examined by the abstract information from the fiscal files related to 462 companies which have been the taxpayer of the inland revenue, for the function of the years of 1 381 to 1383.
The research hypothesis has been examined by the assumption of test concerning to average society.
The results of the research are demonstrative of the existing meaningful difference between the recognized taxable income by the officers of the fiscal affair organization and the recognized taxable income by the CPAs.
This is whereas the results of the test is related solely to the companies which there is a difference between the taxable income of the above-mentioned groups and there are many companies too, which their recognized taxable income by the CPAs has been accepted by the fiscal affair organization.
M. Bozorg Asl; A. Sarafraz Ardekani
Volume 7, Issue 25 , April 2009, , Pages 105-125
Abstract
The purpose of firm's management is to maximize the firm’s value and as a result, to increase stockholder’s equity by providing more yields than their expectations. Basically, dividend is one of the most important sources of yields for the stockholders. The firm's managers recognized that ...
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The purpose of firm's management is to maximize the firm’s value and as a result, to increase stockholder’s equity by providing more yields than their expectations. Basically, dividend is one of the most important sources of yields for the stockholders. The firm's managers recognized that their stockholders are seeking a stable policy in dividend payment because stable dividend policy reveals that the firm is financially stable and holds a lower business risk and increases stock market value. This paper investigates the relation between stable dividend policy and abnormal yields of firm's stock, And the difference of stable dividend policy among various industrial groups in Tehran exchange market on samples consist of 80 working company from 17 different industrial groups between the years 1379 to 1386. The main variable of this paper consist of stable dividend policy as an independent variable and abnormal yields of firm's stock as a dependent variable. Stable dividend policy was measured by Standard deviation of dividend and abnormal yields were measured by capital asset pricing model (CAPM).
The result of performed analysis indicate that there is a significant correlation between stable dividend policy and abnormal yields at the confidence level of 95% ,but the stable dividend policy do not vary among various industrial groups significantly.
Accounting and various aspects of finance
Javad Shekakhah; Iraj Asghari
Abstract
This article deals with modeling the long-term performance of IPOs in the Tehran Stock Exchange and OTC. Due to the difficulty of determining the definition of the long-term period, modeling was initially conducted for 12 periods. These periods ranged from 3 to 36 months. The purpose of this modeling ...
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This article deals with modeling the long-term performance of IPOs in the Tehran Stock Exchange and OTC. Due to the difficulty of determining the definition of the long-term period, modeling was initially conducted for 12 periods. These periods ranged from 3 to 36 months. The purpose of this modeling was to analyze and compare the results and identify the most suitable periods for explaining the long-term performance of IPOs. Modeling has been conducted at the portfolio level using a Stepwise approach. For this purpose, the monthly time series was formed, and data from 236 IPOs in the Tehran Stock Exchange and OTC markets from 2009 to 2022 have been analyzed. The results showed that the return of the portfolios formed from initial offerings could be explained at a satisfactory level. While the primary factor in explaining the long-term performance of IPOs is market return, the profitability, and its distribution also play a significant role. Finally, the most suitable periods for use as the definition of the long-term period are 12, 21, and 27 months.IntroductionThe long-term performance of Initial Public Offerings (IPOs) has always been disputed by researchers. The inherent challenges of conducting long-term research and the complexities associated with Initial Public Offerings have led researchers to use different methods resulting in inconsistent findings.A prevalent approach in studying long-term IPOs is the use of “factor models” to identify the factors influencing IPO portfolio performance. However, the literature has presented and utilized several factor models. Examples of these models include Fama and French (1993), Carhart (2004), Fama and French (2015), and Ho et al. (2015). Despite some similarities, each of these models employs different factors and variables to explain IPO performance. In recent years, many researchers have criticized the use of these common models in their respective countries, citing reasons such as ineffectiveness of these models. These researchers argue that neglecting the socio-economic context of societies can lead to misinterpretation of return and yield inappropriate results for decision-makers. Consequently, each society should develop and employ its own models. Considering these issues, this research aims to provide models that explain the long-term performance of Iranian IPOs. Specifically, by testing various factors and variables, this study identifies the most effective models for explaining the long-term performance of IPOs in Iran.MethodologyIn this research, a stepwise approach was employed. Monthly data of 236 IPOs between 2009 and 2022 were utilized to construct relevant time series, and the returns of the IPO portfolios were analyzed with respect to potential factors that explain the return. To determine the initial set of variables, a systematic review approach was adopted. Due to the high correlation and multiple proxies for the liquidity factor, the liquidity variables were first reduced to three factors using principal component analysis. In total, 19 different factors and variables were included in the analysis.Given the lack of consensus among researchers regarding the definition of the long-term period, the modeling process in this research considered 12 different periods ranging from 3 to 36 months with a three-month increment. The selection of appropriate models was based on the criteria of accuracy and quality forecast, specifically Theil’s (1975) criterion. Three models that nest met these criteria were chosen, and the corresponding portfolio periods were identified as the defining terms for the long-term period. The validation of the selected models was performed by comparing their adjusted R2 values with those of common models found in the literature. Additionally, out-of-sample testing was conducted using 10% of the data to assess the model’s performance.Results and DiscussionThe research findings indicate that the models developed in this study exhibit a strong explanatory power, accounting for approximately 80% of the variations in the returns of IPO portfolios. Among the different portfolio periods considered, the models constructed using 12, 21, and 27-month portfolios demonstrated superior accuracy and forecast quality according to Theil’s (1975) criteria. As a result, these specific periods were identified as the most suitable definitions for the long-term period in this context. The significant variables identified in the models include market return, profitability, size, and dividend. Although the models generally incorporate a set of relatively common variables, the specific model associated with each defined period can be employed to achieve better results, taking into account the specific characteristics of the long-term period under consideration. Furthermore, it is worth noting that the intercept of the designed models, as well as the intercepts of the common models found in the literature, were found to lack statistical significance.ConclusionBased on the analysis conducted in the research, it can be concluded that utilizing native models specifically designed for IPOs provides a suitable explanation for their long-term performance. The primary factor in explaining the long-term performance of IPOs is found to be the market return. This suggests that the performance of initial offerings is primarily influenced by the overall market conditions, while other variables, such as profitability help modulate this effect. Additionally, the non-significance intercept in the models indicates that there is no evidence of long-term under or over-performance of IPOs in Tehran's financial markets. The superiority of the designed models compared to other common models is evident primarily in the 12-month period. While the performance of the models in other periods depends on the specific model employed.
Javad Shekarkhah; Ghasem Bolu; Mohammad Haghighat
Abstract
In capital assets pricing model (CAPM) frame, the all effective factors in expected return, are summarized in Beta. As many assumptions in this model are not real, it necessitates the development of new models, and each one of them in its own part caused a new deficiency in mentioned assumptions. In ...
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In capital assets pricing model (CAPM) frame, the all effective factors in expected return, are summarized in Beta. As many assumptions in this model are not real, it necessitates the development of new models, and each one of them in its own part caused a new deficiency in mentioned assumptions. In CAPM the assumptions are based on the fact that distribution of returns is normal and all investors are risk averse. However, distribution of returns is not always normal and often there is a significant difference between normal distributions. Mean-variance can be the best method for decision making. If distribution of returns is not normal, then mean-variances generalization is not working. Existence of representative problems, valid or limited debts, correlation between volatility and pricing, and compound returns are factors lid to asymmetry in portfolio returns. As a result, this paper by using cross sectional data and based on Fama-Mac Beth model is analyzing the effect of higher moments on future stock return. In this paper, because of applied target as descriptive research there is a correlation which the effect of skewness and kurtosis of equity return distribution and nonsystematic volatility on future stock return is examined by three different hypothesis. In order to accomplish this paper, a sample of 76 firms participating in Tehran exchange stock between 1389 to 1393 as systematically elimination is selected. As a result of this research, skewness coefficient is effective on future stock return and has a negative relationship with it. On the other hand, whatever the skewness of distribution is negative, then the future stock return is going up. And also there is a positive effect between nonsystematic volatility of equity return and future’s return. On other word, investor by increasing nonsystematic volatility and accepting higher risks, expects higher return in the future
Accounting report
Ali Rahmani; Azam Valizadeh Larijani; Elham Rabihavi
Abstract
The need for a set of qualified accounting standards has led to the development of international financial reporting standards. like many other countries globally, Iran has adopted these standards and required their application in a group of capital market companies. The main purpose of this study is ...
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The need for a set of qualified accounting standards has led to the development of international financial reporting standards. like many other countries globally, Iran has adopted these standards and required their application in a group of capital market companies. The main purpose of this study is to examine the challenges and benefits of implementing International Financial Reporting Standards from the perspective of the executives who are required to use the standards. The statistical population of this study, consisting of managers of banks, insurance companies and, stock exchange companies, are required to comply with IFRS according to the enactment of the Stock Exchange and Securities Organization, which includes a total of 77 companies. The collection tool of this research is a questionnaire that was distributed from September to October 2016. The answers to 59 questionnaires were received from 77 distributed questionnaires. For banks, the biggest challenge was the cost of training at the level of companies and users of financial information, for insurers it was the difference between tax laws and international financial reporting standards, and for other companies, the lack of accountants and auditors that have the technical skills of implementing international financial reporting standards.
