Majid Shariat Panahi; Farman Khosravi
Volume 5, Issue 20 , January 2008, , Pages 61-87
Abstract
The capital asset pricing model (CAPM) states the equilibrium relationships between risk and expected return. This model argues that only systematic risk should be priced in the market; specific or idiosyncratic risk does not get a risk premium. Despite the CAPM being a more useful model in the financial ...
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The capital asset pricing model (CAPM) states the equilibrium relationships between risk and expected return. This model argues that only systematic risk should be priced in the market; specific or idiosyncratic risk does not get a risk premium. Despite the CAPM being a more useful model in the financial and investment profession. However, recent empirical studies have raised serious challenges to this belief. It appears that "B" as a measure of systematic risk, has little power in explaining cross-sectional risk and return relationship over - term periods, but it has been observed that other variables such as "firm size" and "book - to - market ratio" and "earning - to - price ratio", (Fama & French three factors) appear to be more useful risk proxies. This study seeks to explore the cross-sectional determinants of common stock returns (except investment Company) in Iranian emerging stock market, namely Tehran stock Exchange for the period 2000 through 2004. The joint roles of stock returns measured by firm size (ME), book-to-market equity ratio (BE/ME) and earning-to-price ratio (PIE) on monthly returns are examined. The study findings although consistent with central theme of the CAPM, but are inconsistent with the results of similar studies carried out in major developed stock markets recently.
Seyed Majid Shariatpanahi
Volume 6, Issue 21 , April 2008, , Pages 61-82
Abstract
Resources allocation is considered to be one of the main activities for banks. The most important risk that threatens this activity is commitments refusal on the part of facilities receiver. One of the ways that can be used to benefit properly from investment opportunities and help to stop wasting ...
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Resources allocation is considered to be one of the main activities for banks. The most important risk that threatens this activity is commitments refusal on the part of facilities receiver. One of the ways that can be used to benefit properly from investment opportunities and help to stop wasting resources is bankruptcy prediction and default probability.
In this research, we have established Multiple Discriminant Analysis (MDA) model to predict the default of the companies which receive facilities and credit. The result of this research, which are based on the information provided by the companies receiving facilities and credit from Industry and Mine Bank, have indicated that, five ratios of the seventeen selected ratios have the most power in distinguishing the group of companies with default and without default. Another result is that there is a trade-off between ROA and default probability and the last conclusion is that the companies with a higher net profit are more successful in repaying their credits and facilities.
Gh. Karami; A. Tahriri; A. Davarinejad
Volume 8, Issue 31 , October 2010, , Pages 61-77
Abstract
The purpose of this paper is to investigate a relation between real earnings management and accounting earnings management to smooth earnings and to survey this fact when managers smooth earnings by real activities manipulation and when by discretionary accruals manipulation. On this paper is focus on ...
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The purpose of this paper is to investigate a relation between real earnings management and accounting earnings management to smooth earnings and to survey this fact when managers smooth earnings by real activities manipulation and when by discretionary accruals manipulation. On this paper is focus on discretional cash flow from operations as proxy variable of real earnings management and discretional accruals as proxy variable of accounting earnings management. Our statistical population is the firms listed in Tehran Stock Exchange that examined for the time period 1381 to 1386 by 98 firms as the sample.
As a result, we find evidences that show that managers use both real earning management and accounting earnings management to smooth earnings and relation between real and accounting earnings management is Simultaneous and managers use complementarily the two earnings management to smooth income.
Vali Khodadadi; Javad Nikkar; Sajjad Veisi
Abstract
The main objective of this paper is to evaluate the effect of the corporate life cycle stages on the cost of equity of firms listed on the Tehran Stock Exchange. In this study we used Dickinson's Model (2011) to determine the corporate life cycle stages and Gordon Model to calculate cost of equity. In ...
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The main objective of this paper is to evaluate the effect of the corporate life cycle stages on the cost of equity of firms listed on the Tehran Stock Exchange. In this study we used Dickinson's Model (2011) to determine the corporate life cycle stages and Gordon Model to calculate cost of equity. In this study, we first took samples using the cash flow statement data (including cash flow from operating activities, cash flow from investing activities and cash flow from finance activities) and separated the firms in the growth stage, maturity stage and decline stage, then, using multivariate regression analysis and mean comparison tests, hypotheses were studied and tested. The results of 110 firms (990 company - year) from 2006 to 2014 shows that the firms, cost of equity in different stages of the life cycle (growth, maturity, decline) are significantly different. The results also show that in the decline stage the cost of equity is at the highest level and in the maturity stage it is at the lowest level.
Ghasem Blue; Amir Abbas Sahebgharani; seyedeh mahboobeh jafari
Abstract
In recent years, the capital market has played a significant role in the financing of the government and the private sector and provided a variety of tools for this purpose, mainly based on the asset backed securities and asset base securities, on the other hand, due to the requirement of the supervisory ...
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In recent years, the capital market has played a significant role in the financing of the government and the private sector and provided a variety of tools for this purpose, mainly based on the asset backed securities and asset base securities, on the other hand, due to the requirement of the supervisory authority of the capital market to rate its debt securities before it is published and the need to enter the rating process of securities, it is necessary to have securities rating pattern Published in the capital market are designed and explained. Based on the above, the present study attempts to develop a credit rating model for asset backed Securities based on sukuk in the capital market. On one hand, the problems of executing Sukuk publishing, such as obligatory guarantee, are overcome, and on the other hand, the field of transparency of the market Financing and accelerating the financing process through this market will ultimately lead to a reduction in the cost of financing a firm.In this study, firstly, by studying the theoretical foundations of the publishing of asset-backed securities and other sources of information, such as guidelines issued by the Capital Markets Authority, the International Institutions and International Financial Institutions' Guidelines, the Primary Model The asset back rating was extracted, and then this model was developed for the purpose of obtaining consensus and Delphi Research methodology was subjected to an expert opinion survey and ultimately the final model of asset-backed securities ranking was presented.
Zahra Dianati Deylami; Amir Hossein Hossein Pour; Hossein Ahmadi
Abstract
One important aspect of accounting research in different countries is acquiring knowledge about situation of accounting systems and finding weaknesses and gaps, providing solutions to resolve existing deficiencies, and upgrading to higher levels. According to the four steps of the evolution steps of ...
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One important aspect of accounting research in different countries is acquiring knowledge about situation of accounting systems and finding weaknesses and gaps, providing solutions to resolve existing deficiencies, and upgrading to higher levels. According to the four steps of the evolution steps of management accounting, the higher the steps, tools of cost management becomes more advanced and reasonably the effect on operating profit more, in this study, examine effect of tools and techniques of management accounting in evolution step of management accounting form on operating profit. Statistical population of the study is financial management companies by the end of 1392 (In Solar Calendar) In Tehran Stock Exchange is accepted. Data is collected by questionnaire. The results show that if evolution step of management accounting firms goes up, operating profit will goes up too, in the meanwhile, there is a exception, that is companies are in the step two have higher operating profit than companies which are in the steps third and fourth of evolution of management accounting.
Saber Sheri; Mohammad Marfou
Volume 5, Issue 17 , April 2007, , Pages 63-104
Abstract
There are significant differences in disclosure of information among firms. Identification of factors affecting management in formation disclosure is a useful research area and wide variety of users such as: market pol icy makers, investors and academicians could take advantage of the ...
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There are significant differences in disclosure of information among firms. Identification of factors affecting management in formation disclosure is a useful research area and wide variety of users such as: market pol icy makers, investors and academicians could take advantage of the results.
Earning forecast is important information that firms usually disclose. Corporate governance improves the performance of companies and their quality of disclosure.
This empirical research investigated the relationship between properties of management earning forecast, with two important corporate governance mechanism; outside directors and institutional investors.
Our sample is selected from listed companies in Tehran Stock Exchange (TSE) for a period of the years 2003 to 2005. The percentage of outside directors and firms aggregated common stock held by institutions are independent variables. Properties of management earnings forecasts are dependent variables. Forecast precision, forecast timeliness, forecast bias and the number of forecasts that is revised are proxies for those properties. The control variables are: size of the firm, the firm's auditor. the ratio of market to book value of the common equity, number of days between the forecast date and fiscal ending period date and good or bad news.
We established hypotheses based on the above variables and tested them by using single and Multiple Regression Analysis and Mann-Whitney U.
The result showed that; there is no significant relationship between two corporate governance mechanisms and proper ties of management earnings forecasts. The result as a whole doesn't discern any significant relationship between outside directors and in situational investors to precision, bias, timeliness of earning forecasts and revise on them.
G. Boulou; Y. Hassas Yeganeh; R. Harasani
Volume 8, Issue 29 , April 2010, , Pages 65-95
Abstract
This paper investigates earnings quality’s trend in Tehran stock exchange listed companies over the period 1380-1387 using a sample of 64 companies in 4 industries. In this paper, earnings quality was measured across 4 dimensions: accruals quality, earnings persistence, earnings predictability ...
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This paper investigates earnings quality’s trend in Tehran stock exchange listed companies over the period 1380-1387 using a sample of 64 companies in 4 industries. In this paper, earnings quality was measured across 4 dimensions: accruals quality, earnings persistence, earnings predictability and smoothness. The results provided no evidence of decline in earnings quality over the sample period. Further statistical analysis showed that the earnings quality data are descriptive of a random walk model. Only regressing the measures of earnings quality on time provided some evidence of slight improvement in accruals quality in one of the industries.
Rafik Baghoomian; Hojjat Mohammadi Mohammadi; Sajad Naghdi
Abstract
This paper assesses the impact of a comprehensive set of macroeconomic factors (including changes in exchange rate, changes in inflation rate, changes in liquidity, changes in trade balance, and changes in gross domestic production) on error of management earnings forecast in companies ...
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This paper assesses the impact of a comprehensive set of macroeconomic factors (including changes in exchange rate, changes in inflation rate, changes in liquidity, changes in trade balance, and changes in gross domestic production) on error of management earnings forecast in companies annual reports. Detailed analysis of research related to earnings forecasting bymanagers and especially researches in Iran, indicates lack of adequate attention to the impact of the macroeconomic variables on earnings forecast error so this paper seeks to fill this research gap. The data set includes 80 companies listed on Tehran Stock Exchange (TSE) for the period of 1386 - 1393. The study used Ordinary Least Squares (OLS) regression model toexamine the relationship between above mentioned macroeconomic factors and management earnings forecast. The empirical results show that among the macroeconomic variables that have been examined, there are only significant positive relationships between two of above mentioned macroeconomic factors (including changes in exchange rate, and changes in gross domestic product) and management earnings forecast. We did not find any statistically significant association between other macroeconomic factors (including changes in inflation rate, liquidity, and trade balance) and management earnings forecast. The results suggest that macroeconomic variables can affect the accuracy of earnings forecasts by management, hence the neglecting of such factors can result in increasing in the error of earnings forecasts.
Ashkan Gholami Fatideh; Kave mehrani; Arash Tahriri
Abstract
The purpose of this study is to explore how the auditors' work stress relates to the auditing quality reduction behavior with stressors such as time pressure, work-family conflict and role ambiguity. The philosophy of the existence of auditing firms in capital markets is to play a role in reducing information ...
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The purpose of this study is to explore how the auditors' work stress relates to the auditing quality reduction behavior with stressors such as time pressure, work-family conflict and role ambiguity. The philosophy of the existence of auditing firms in capital markets is to play a role in reducing information asymmetry by providing high quality reporting. The quality of audit reports is largely related to the audit engagement. This research is of quantitative type and is in the category of descriptive studies. A questionnaire was used to collect research data. Due to the uncertainty of the population, 365 questionnaires were received in 2022 from auditors working in auditing firms. Data were analyzed using descriptive statistics and structural equation modeling (SEM). The findings of the present study indicated that time pressure, work-family conflict and role ambiguity have a positive relationship with the auditor's work stress. Also, time pressure, work-family conflict, and role ambiguity are positively associated with audit reduction behavior. Finally, work stress has a positive relationship with audit quality reduction behavior and plays a role as a mediating variable in the relationship between time pressure, work-family conflict, role ambiguity and audit quality reduction behavior. The results of this study can be used as a criterion for auditing firms to maintain the quality of audit reports by reducing the stressors of auditors.
sasan mehrani
Accounting and various aspects of finance
Mousa Bozorg Asl; Mohammad Ebrahimi noudeh; Javid Yarahmadi
Abstract
This research has been conducted with the aim of experimental test of the effect of political relations on the amount of investment of companies and its efficiency in the period of 2012 to 2019 of companies listed in the Tehran Stock Exchange. The method of data collection is archival and reference to ...
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This research has been conducted with the aim of experimental test of the effect of political relations on the amount of investment of companies and its efficiency in the period of 2012 to 2019 of companies listed in the Tehran Stock Exchange. The method of data collection is archival and reference to databases and the method of data analysis is multivariate regression model using panel data model and fixed effects method. The results show that the relationship between political relations and the amount of investment as well as investment efficiency is positive and significant. These results indicate that companies with political connections have more investment than other companies and investment efficiency is higher in companies with political connections. According to the research findings, it can be seen that companies with political connections invest more and more efficiently than other companies due to their government benefits and privileges, as well as the ease of attracting financial resources.
Mohamad Hosein Setayesh0F; Manoochehr Roosta
Volume 11, Issue 44 , March 2015, , Pages 71-95
Abstract
Conservatism is the asymmetries of approving earnings and costs. This asymmetric can be influential on financial performance of the firms which is reported in terms of figures of financial statements. The purpose of this study is the investigation of the relationship between accounting conservatism and ...
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Conservatism is the asymmetries of approving earnings and costs. This asymmetric can be influential on financial performance of the firms which is reported in terms of figures of financial statements. The purpose of this study is the investigation of the relationship between accounting conservatism and financial efficiency scores as a comprehensive measure of financial performance. For this purpose, the variables of balance sheet conservatism, earnings conservatism and combined conservatism were examined along with financial efficiency scores. Based on 123 corporations from 2002 to 2011 and fixed effects model, results indicate that there is no relationship between balance sheet conservatism and financial efficiency scores, but the relationships between earnings and combined conservatism with financial efficiency scores are positive. In addition, companies have been categorized to two groups with high and low level financial efficiency scores, based on first and third quartiles of financial efficiency scores 10 years average. The results indicate that there is no significant difference between the groups with high and low scores in terms of earnings and combined conservatism.
nezamodin rahimodin
Gholamhossein Asadi; Behzad Beig Panah Beig Panah
Volume 14, Issue 53 , April 2017, , Pages 71-90
Abstract
Cost stickiness denotes the asymmetric response of costs to sales increasesversus sales decreases. In this paper, we also consider the concept of costanti-stickiness. Cost anti-stickiness happens when the decrease of costs incase of a fall in sales is more than the increase of costs due to an equal rise ...
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Cost stickiness denotes the asymmetric response of costs to sales increasesversus sales decreases. In this paper, we also consider the concept of costanti-stickiness. Cost anti-stickiness happens when the decrease of costs incase of a fall in sales is more than the increase of costs due to an equal rise insales. This phenomenon happens because of existence of optimisticmanagers in past years and inefficient stickiness cause of sales volatilityagainst manager’s expectation.This paper examines the cost stickiness and anti-cost stickiness of nonmanufacturingcosts in Iranian firms using panel data analysis. The sampleincludes 229 publicly-traded firms listed in Tehran Stock Exchange. Usingdata for 2012-2015, the results showed that not only do the nonmanufacturingcosts have stickiness behavior but also they have antistickinessbehavior that occurs due to the changes in the sales in the previousyears.
Ghasem blue; Zahra Farjam
Abstract
Aware of the economic performance of the business in the future will help potential investors and Creditors in economic decisions. Investment decision taken on the basis of forecasted earnings. Therefore the accuracy of these predictions is important. Prior research has shown that cost forecast error ...
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Aware of the economic performance of the business in the future will help potential investors and Creditors in economic decisions. Investment decision taken on the basis of forecasted earnings. Therefore the accuracy of these predictions is important. Prior research has shown that cost forecast error is more than sales forecast error and has more effect on the earning forecast error and claimed that this error is due to ignoring the cost behavior. This research was investigated cost behavior forecast accuracy by studying 104 company from 2010-2015. Samples were separated to companies with symmetrical (equal) favorable and unfavorable sales forecast error and were compared. T test and Mann-Whitney tests were used for this purpose. The results showed that managers are not predicting the cost variability correctly; however, due to the symmetry of the earning forecast error in firms with equal sales forecasting error, it can be concluded that managers generally pay attention to cost behavior in their predictions. In other words, according to the proportion of sales forecast error and cost forecast error, the main reason for the earning forecast error is the error in predicting sales.
Mohammad Namazi; Javad Moradi
Volume 3, Issue 10 , July 2005, , Pages 73-101
Abstract
In today's developed corporations, because of multiplicity of owners, direct monitoring of managers' performance is impossible, but this group only realizes the released benefits. Therefore, it is reasonable that they use governance mechanisms, for monitoring and optimal controlling behavior of hired ...
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In today's developed corporations, because of multiplicity of owners, direct monitoring of managers' performance is impossible, but this group only realizes the released benefits. Therefore, it is reasonable that they use governance mechanisms, for monitoring and optimal controlling behavior of hired managers. One means in reaching this purpose is rewarding managers based on their performance and motivating them, in accordance with the firm's purposes, in the manner discussed in the agency theory.
The main purpose of this paper is to examine the agency theory implications to isolate market determinants of board of director's bonuses, on the basis of data collected from Tehran's Securities Exchange (TSE) market for 1378 to 1382. For this purpose, by utilizing a regression model, board of director's bonus for selected corporation, were related to some accounting and market-based performance measures as well as some fixed variables (with respect to performance) such as the firm's size and the ownership concentration.
The results at the level of all corporations suggest that there is a significant relationship between Return on Assets (ROA) ratio and its changes, firm's size, ownership centralization, financial risk and board of directors' bonus. At the industry level, both the firm's size and ROA ratio were used more than the other selected variables. By substituting "changes in bonus" for the bonus itself, the explanatory power of the model used, was weakened. In this stage, the only variable that is significantly related to changes in bonuses is the ROA ratio.
Gholamhossein Mahdavi; Ghodrat Sharifinia
Volume 4, Issue 14 , July 2006, , Pages 73-98
Abstract
In Iran, most of the time, companies prepare their financial statements merely according to the provisions of depreciation in the direct taxes act. It seems that, in some cases, these statements are not based on accounting principles. Depreciation expense is one of items which its calculations are done ...
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In Iran, most of the time, companies prepare their financial statements merely according to the provisions of depreciation in the direct taxes act. It seems that, in some cases, these statements are not based on accounting principles. Depreciation expense is one of items which its calculations are done on rates and methods included in the direct taxes act.
In this paper, the amount of go-togetherness of the depreciation provisions in the direct taxes act with the actual depreciation expense of depreciable assets was investigated. In order to test the amount of go-togetherness of depreciation provisions, five hypotheses were presented. The instrument utilized to test the hypotheses is a questionnaire. The analysis of data shows that the actual depreciation expense of depreciable assets does not have enough and necessary go-togetherness with the depreciation expense which is in line with the depreciation provisions in the direct taxes act.
Accounting report
Mohammad Javad Salimi; Ghassem blue; Maghsoud Amiri; Hamed Zakeri
Abstract
The earnings forecasts report is considered as one of the most important and effective reports in investors' decision-making. The purpose of this study is to present an earnings forecasts reporting framework in Iran's capital market. To achieve this research goal, the earnings forecasts reporting framework ...
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The earnings forecasts report is considered as one of the most important and effective reports in investors' decision-making. The purpose of this study is to present an earnings forecasts reporting framework in Iran's capital market. To achieve this research goal, the earnings forecasts reporting framework was identified first by studying the theoretical foundations and the background of the research, as well as interviewing 21 experts using the snowball method and the theme analysis method. Then, through the implementation of the fuzzy Delphi method and solicitation of opinions from 183 experts using a questionnaire and targeted judgmental sampling method, a consensus was reached on the reporting framework, resulting in the presentation of the earnings forecasts reporting framework in Iran's capital market. The research population included university faculty members, employees in regulatory organizations, investors, auditors, and providers of financial information. The research results showed that out of 122 detailed themes extracted through theme analysis, categorized into six main themes and 14 sub-themes, 97 detailed themes obtained the consensus among the Delphi group, thereby forming components of the earnings forecasts reporting framework. The main elements of the earnings forecasts reporting framework encompass generalities, environmental fields, characteristics, consequences, challenges, and evaluation. The findings of this research can serve as a guide for developing financial reporting standards and modifying procedures and regulations.IntroductionThe management forecasts earnings is one of the disclosed information outside the financial statements, which reflects the management's forecast about the future prospects. This report is one of the most important sources of information for companies in the capital market. Corporate management possesses considerable information advantages about contingencies related to future profitability. Management disclosures are considered a valuable and potential source of information for investors. Investors are interested in estimating the future benefits of their investment so that they can assess receiving future cash earnings as well as the value of their shares. Therefore, the expected earnings from companies are important for investors and beneficiaries to make investment decisions.How to present the earnings forecast report has been a challenging issue in recent years. Therefore, in the current situation, examining the framework and reporting method of earnings forecasting in the Iranian capital market using the opinions of experts is regarded as an essential need.Considering the importance of earnings forecast reporting for investors, the problem of the current research is: What is the earnings forecast reporting framework in Iran's capital market? Additionally, what are the components of this framework based on the country's economic and capital market conditions? Literature ReviewThere are several reasons for disclosing the information of managers and publishing the earnings forecast report. One reason for this is agency theory, which refers to the conflict of interests between managers and owners. In addition, we can refer to the Signaling theory, Expectation adjustment hypothesis, and Legal liability hypothesis.The primary framework of earnings forecasting reporting includes the purpose, users, limitations, environmental fields, characteristics, and consequences.Hirst et al. (2008) provided a framework regarding management earnings forecasting. They categorized earnings forecasts into three components including antecedents, characteristics, and consequences. They concluded that earnings forecasting characteristics are less explored in both theoretical and empirical research, despite managers having the most control over this component.Preussner and Aschauer (2022) synthesized the literature on management earnings forecasts and adaption mechanisms, combined existing theories into a unifying framework. Overall, the literature review provides strong support for a positive correlation between the extent and credibility of management earnings forecasts, on the one hand, and stock returns, share liquidity, and analyst coverage, on the other hand. Earnings forecasts tend to be optimistically biased, with a positive correlation with forecast uncertainty, earnings flexibility, financial distress, investor sentiment, and the share price dependency of managers' remuneration. Firm growth, legal liability, and litigation risk are significantly associated with forecast pessimism.Until 2017, listed companies in Tehran Stock Exchange published an independent report titled earnings forecasts report. The Securities and Exchange Organization announced in a notification that since January 2018, the Issuers are not allowed to publish earnings forecasts report. Instead, they are required to prepare and disclose the management's interpretive report alongside the interim and annual financial statements. Recently, as of July 2021, the return of the earnings forecast report was announced with a new procedure for five industries.MethodologyTo achieve the goal of the research, the primary framework was first identified by studying the literature review and theoretical background. Semi-structured interviews were then conducted with 21 experts using the snowball sampling method. The data from the interview was analyzed using the theme analysis method and the earnings forecasts reporting framework was extracted according to the country's environmental characteristics. Finally, the fuzzy Delphi method was implemented and opinions were gathered from 183 experts through a questionnaire and targeted judgment sampling method to reach a consensus on the earnings forecasts reporting framework.The statistical population of the research included university faculty members, employees in regulatory organizations, investors, auditors, and providers of financial information.ResultsThe research results showed that out of 122 detailed themes extracted through theme analysis, which were categorized into 6 main themes and 14 sub-themes, 97 detailed themes obtained consensus from the Delphi group and were identified as components of the earnings forecasts reporting framework. The main themes of the framework are generalities, environmental fields, characteristics, consequences, challenges, and evaluation. Each main theme consists of sub-themes. For example, the generalities theme includes sub-themes such as purpose, users, and limitations. The environmental fields theme covers aspects related to the forecast environment and company characteristics. The characteristics theme encompasses the method of publishing, features, text of the report, and assurance. The consequences theme addresses the consequences of publishing and non-publishing. The challenges theme explores the challenges in the environment and the company. Lastly, the evaluation theme focuses on the evaluation of the disclosure procedure.DiscussionThe findings of this research can serve as a valuable guide for developing financial reporting standards and modifying procedures and regulations.The paper has some limitations. The use of questionnaires, which is common in humanities research, is inherently limited, and this research is no exception. The time limitation, the diverse knowledge base of the experts, and their interest in the research topic may have influenced the quality of the experts' responses to the questionnaire.ConclusionThis research has presented the earnings forecasts reporting framework in Iran's capital market, consisting of 6 main themes. The results of this study can help Iran's Accounting Standards Development Committee in developing standards. Furthermore, the Securities and Exchange Organization can use the framework, particularly for the evaluation theme to modify and present regulations related to earnings forecasting reporting. Additionally, investors can use the results of this research to enhance their understanding about the earnings forecast report and make more informed investment decisions. Issuers can also use the framework to improve information disclosure and prepare reports.AcknowledgmentsI am grateful to all the esteemed professors and experts who helped me in this way. I would also like to express my gratitude to the staff of Allameh Tabataba’i University for their cooperation.
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.
Accounting tools
Mehri Bakhteyari; Javad Rezazadeh; kumars Biglar
Abstract
The implementation of the engagement quality control review (EQCR) by the engagement quality control reviewer has been considered as one of the key elements of quality control in the auditing standards and its implementation is required in the audit of companies listed on the stock exchange. In this ...
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The implementation of the engagement quality control review (EQCR) by the engagement quality control reviewer has been considered as one of the key elements of quality control in the auditing standards and its implementation is required in the audit of companies listed on the stock exchange. In this research, the data were collected through (1) conducting interviews with 25 partners of Iranian auditing firms in the spring and summer of 2023 and (2) the opinions of 12 certified accountants that were published in a newspaper or professional journals in the form of a conversation, round table, notes or articles. Then, by applying the grounded theory, the components that are the obstacles to the effective application of EQCR are identified and presented in the form of a conceptual system model. The validity of the research model was confirmed by 7 audit partners. The findings from the analysis of research data show that there are various obstacles in its different dimensions, the most important of which are: the structure and organization of some audit firm, the small size of many audit firms, economic considerations, low fees of Iranian audit firms, lack of qualified auditors, moral issues in the society, the society's specific problems, governing laws and regulations, weaknesses in quality grading of audit firms, inadequate communication with international professional communities, low awareness of auditing and lack of development, and low application of technology in Iranian audit firms. Considering that the international auditing standard 220 has been updated and includes more requirements for the EQCR, along with the findings of this research showing that the quality control standard is not effectively implemented by Iranian audit firms, some suggestions are given to fill these gaps.IntroductionThe objective of a firm is to design, implement, and operate a system of quality control for audit, review of financial statements, or other assurance or related services engagements performed by a firm, that provides the firm with reasonable assurance that: (a) The firm and its personnel fulfill their responsibilities in accordance with professional standards and applicable legal and regulatory requirements, and conduct engagements in accordance with such standards and requirements; and (b) Engagement reports issued by the firm or engagement partners are appropriate in the circumstances. According to the auditing standards, engagement quality review is an objective evaluation of the significant judgments made by the engagement team and the conclusions reached thereon, performed by the engagement quality reviewer and completed on or before the date of the engagement report. Engagement quality reviewer is a partner, other individual in the firm, or an external individual, appointed by the firm to perform the engagement quality review (IAASB, 2020). Surveys show that engagement quality control review, as one of the key elements of quality control, has not been established in Iranian audit firms. Its causes have not been clarified in previous research. Therefore, in this research, we seek to clarify its causes and obstacles.Research Question(s)What are the obstacles of applying engagement quality control review in Iranian audit firms?Literature ReviewEngagement quality control review is one of the key elements of the quality control system of auditing firms, which is considered in the auditing standards. The literature review shows that this issue has not been studied in Iran. However, some Iranian certified public accountants and audit firm partners have pointed out some obstacles of implementing quality control reviews in the form of notes and roundtables published in professional journals. The Public Company Accounting Oversight Board has described the key issues of quality control review in the United States in 2023 in a report entitled " SPOTLIGHT: Inspection Observations Related to Engagement Quality Reviews". This report shows that there are still many concerns about the quality control review (PCAOB, 2023).MethodologyConsidering the nature of the research problem, which is subjective and relies on the experience of audit institution partners, the application of a qualitative research approach is deemed appropriate. Additionally, since no specific theory has elucidated this phenomenon and there has been no prior research in this area, the use of grounded theory is fitting. Conducting interviews is one of the main methods of data collection in grounded theory (Strauss & Corbin,1990). Therefore, research data have been collected through interviews. Interviews were conducted with 25 partners of audit firms in the spring and summer of 2023. It is noteworthy that in grounded theory, all information is considered as data (Danai Fred et al., 2013). Hence, discussions, roundtables or articles published by 12 Iranian certified public accountants in professional journals or newspapers were also used as data. In the qualitative method of research, unlike the quantitative approach, statistical sampling is not important and sampling is judgmental. That is, people who have the most experience and involvement with the studied phenomenon are selected. Interviews with participants continue until theoretical saturation is reached, meaning that new participants do not introduce new insights beyond what has already been discussed.The interviews are then transcribed, and conceptual tags are attached to each sentence or paragraph of the text. In grounded theory, data analysis is done in three stages: open coding, axial coding, and selective coding. In this research, three methods were used to analyze the data.ResultsAfter conducting the research and data analysis, it is found that there are various obstacles in various dimensions for the application of quality control in Iranian audit firms. These obstacles were extracted in the form of conceptual tags. Based on selective coding, they were classified into different categories. To provide a comprehensible presentation of the barriers, these conceptual labels were categorized and presented in the form of inputs, processes, outputs, consequences, and contextual factors. Presenting these conceptual labels of obstacles in different dimensions helps us to have an accurate picture of the causes and obstacles so that we can adopt strategies to solve them. Some of the most important obstacles are: the structure and organization of some audit firms, the small size of many audit firms, economic considerations, low fees of Iranian audit firms, lack of qualified auditors, moral issues in the society, the society's specific problems, governing laws and regulations, weaknesses in quality grading of audit firms, inadequate communication with international professional communities, low awareness of auditing, and lack of development, and low application of technology in Iranian audit firms.DiscussionIn this research, after analyzing the data, many obstacles are extracted in various dimensions. These factors limit the effective implementation of engagement quality control review as one of the key elements of the audit quality control system. With these conditions, achieving audit quality becomes challenging.ConclusionIn this research, the obstacles to the application of quality control review in Iranian audit firms were examined. The findings show that there are many obstacles in different dimensions. The structure and organization of some audit firm, the small size of many audit firms, economic considerations, low fees of Iranian audit firms, lack of qualified auditors, moral issues in the society, the society's specific problems, governing laws and regulations, weaknesses in quality grading of audit firms, inadequate communication with international professional communities, low awareness of auditing and lack of development, and low application of technology in Iranian audit firms are the main obstacles to the application of engagement quality control review in Iranian audit firms. If these obstacles are not removed, the audit quality of Iranian audit firms will be affected. Additionally, in the present circumstances, it cannot be assured that professional standards will be fully followed. This research is the first Iranian research that has studied this issue and can be an avenue for future research. Future research could study other stakeholders or rank these obstacles. Furthermore, conducting similar research in the future will clarify the extent to which these obstacles can be overcome. The findings of this research can provide a clear perspective on engagement quality control review in Iranian audit firms and its obstacles to regulators, such as the Iranian Association of Certified Public Accountants (IACPA). One suggestion arising from the findings could be to increase the weight of the scores related to the engagement quality control review. Another suggestion would be to promote and clarify the benefits of engagement quality control review for audit firms. The last suggestion is the training of competent quality control reviewers by the AICPA or other educational and professional centers.AcknowledgmentsWe acknowledge the participants in this research who helped us.
Accounting report
Mohammad Soleymani; Mohammad Arabmazar Yazdi; MohammadHosien SafarZade; Javad Shekarkhah
Abstract
This study aims to investigate how a change in the accounting method of calculating bank loan loss provisions affects financial reporting quality of banks. In doing so, the current theoretical literature on the topic of the research has been described and the conflicting arguments in the previous research ...
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This study aims to investigate how a change in the accounting method of calculating bank loan loss provisions affects financial reporting quality of banks. In doing so, the current theoretical literature on the topic of the research has been described and the conflicting arguments in the previous research have been expressed. Subsequently, using the transfer matrix method, loan loss reserves have been calculated for a sample of 17 banks, assuming that the method approved by international accounting standards (expected credit loss model) has been applied. Then, the research variables’ data, spanning from 2017 to 2021, was collected and analyzed under two assumptions: employing the current method and using the expected credit loss model. Then, the research hypothesis was tested using the least squares method. The results of the research show that the relationship between the change in the reporting system and discretionary accruals as an indicator of the financial reporting quality is negative and significant. Therefore, a change in the current accounting methods used for the calculation of loan loss reserves causes reduction in discretionary accruals and improvement of financial reporting quality. On the other hand, the results of this research show that large banks are more interested in using discretionary accruals and applying profit management than small banks, which can be caused by the "political costs theory". IntroductionThe quality of financial reports remains an important issue, garnering serious attention from regulators, professional accountants and other users of financial information. This is due to the irreplaceable role of financial reporting quality in reducing agency problems and information asymmetry (Anto & Yusran, 2023). In the banking system, the method used for calculating loan loss reserves is one of the most important factors affecting the quality of financial reporting. This is because the loan loss provision, typically the largest bank accrual, is highly correlated with banks' net income and represents the most prevalent accrual. Loan loss provisions are accruals of fundamental importance to bank performance, and they also reflect information asymmetry (Beatty & Liao, 2014).Despite the great importance of loan loss calculation method on banks’ financial reporting, few studies have examined the effectiveness of the current method used in Iranian banks. Additionally, research exploring the impact of changes in the loan loss calculation method on the quality of banks' financial reporting has been limited. Given this context, it becomes imperative to investigate the influence of this crucial variable on the quality of bank financial reporting. Conducting this research, particularly in Iran with its bank-oriented economy, can enhance the quality of financial reporting. This improvement would be achieved by selecting the optimal method for calculating loan loss reserves, thereby increasing the transparency of information in banks.Research Question(s)The main question of this research is as follows:Does the change in the bank loan loss reserves calculation method have a significant effect on the quality of banks financial reporting? Literature ReviewIn the current literature, two predominant views exist regarding the impact of changes in accounting methods on the quality of financial reporting. The first view posits that changing accounting methods, equated to adopting international accounting standards, enhances financial reporting quality. Conversely, the second view contends that there is either no relationship or a negative relationship between the adoption of new accounting methods and financial reporting quality. Mensah (2021) demonstrated a significant negative relationship between the use of new accounting methods and profit management, suggesting that methods endorsed by international accounting standards elevate the quality of companies’ financial reporting. This finding aligns with the conclusions of researchers like Nikhil et al. (2023), Ozili and Outa (2019), and Haapamakia (2018). On the contrary, Oppong & Bruce-Amartey (2022) examined the effects of new standards and corporate governance on accounting quality in Ghana, discovering that the implementation of new standards adversely impacts accounting quality. Similar conclusions were drawn by researchers like Suadiye (2017) and Campa & Donnelly (2016). MethodologyThis research employed a quantitative approach to examine the effect of changes in accounting methods on the quality of financial reporting. Initially, data was gathered using the current numbers of the financial statements of selected banks. Subsequently, the loan loss reserve calculation method was altered, and the research data was re-estimated using the new accounting method, aided by a transition matrix and the IFRS 9 formula. The research hypothesis was then tested using both datasets. The sample comprised data from 17 Iranian banks spanning the years 2017 to 2021. This data was collected using the Rahavard Novin database, the banks' financial statements, and analyzed using SPSS version 27 and EViews version 10 software, employing the least squares regression method. ResultsThe research findings reveal a significant negative relationship (at a significance level of 0.000) between the financial reporting system and discretionary accruals. This outcome suggests that a change in the method of calculating bank loan loss reserves, coupled with the adoption of a new method, leads to a decrease in discretionary accruals and in banks' earnings management practices. Additionally, the research indicates that the relationship between discretionary accruals and cash flow from operating activities, banks' profitability, and financial leverage is significantly negative. In contrast, the relationship between discretionary accruals and bank size is positive and significant. However, there appears to be no significant relationship between growth rate and asset turnover with discretionary accruals at the 5% significance level. DiscussionThe results of this research show that adopting the expected loss method, as opposed to the current method used in Iranian banks for calculating loan loss reserves, enhances the transparency of bank information and improves the quality of financial reporting. By reducing discretionary accruals, the new reporting system encourages banks to utilize fewer accruals, likely leading to a decrease in the use of profit management methods. Consequently, the adoption of IFRS in Iranian banks positively impacts the industry and its stakeholders. Furthermore, the research reveals that larger banks tend to employ discretionary accruals and engage in profit management more than smaller banks, a phenomenon potentially explained by the "political cost theory". ConclusionThe relationship between the quality of financial reporting and changes in bank loan loss reserves is positive and significant. Thus, the research hypothesis is confirmed, supporting the perspective of the first group (as discussed in the Literature Review section) in the context of Iranian banks. Based on these findings, it is recommended that the central bank mandate banks to disclose their reserves using the expected credit loss method as an initial step. Subsequently, banks whose reserves significantly deviate from the amounts calculated according to IFRS standards should be compelled to adjust their reserves over several years. This gradual approach aims to align the current reserves more closely with those calculated using the expected credit loss method.
Gholamreza Karami; Ali E. Kordlar; Mohamad Sadegh Ghaznavi
Volume 11, Issue 42 , July 2014, , Pages 87-59
M. A. Aghaei; A. A. Javan; M. Nazemi Ardakani; E. Mousavi
Volume 7, Issue 25 , April 2009, , Pages 87-103
Abstract
Decision making about capital structure and determining its effectiveness is increasingly important subject in managing of firms. In addition, earnings management is one of the effective factors on capital structure in corporate governance subjects. This study aimed to investigate the impact of earnings ...
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Decision making about capital structure and determining its effectiveness is increasingly important subject in managing of firms. In addition, earnings management is one of the effective factors on capital structure in corporate governance subjects. This study aimed to investigate the impact of earnings management, Profitability ratios and firm size on the capital structure of listed companies of Tehran Stock Exchange (TSE) in the period of 1382-1386. A sample of 125 companies of TSE was taken for research study. For the analysis of data, multiple regression model approach was applied. Gearing ratio was taken as dependent variable whereas absolute discretionary accruals, ROA, ROE, and Size were used as independent variables. The results indicate that absolute discretionary accruals have insignificant effect on dependent variable. According to the results, Size, and ROE have positive Impact on the capital structure of the listed companies in Tehran stock exchange.
Seyed Ali Hosseini; Zahra Masoumi Bilondi
Abstract
The recent welcome of companies to capital increases from revaluations has highlighted the role of experts, and increasing trust on the work of experts has led to concerns about audit quality. The aim of this study is to identify the challenges and barriers to using expertise services in auditing and ...
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The recent welcome of companies to capital increases from revaluations has highlighted the role of experts, and increasing trust on the work of experts has led to concerns about audit quality. The aim of this study is to identify the challenges and barriers to using expertise services in auditing and ways to improve it. The research is qualitative and the data were collected through interviews with 17 auditors and Official Experts of Justice official and analyzed by theme analysis.According to the research findings, weakness of supervision, Lack of expert independence , limitations, structural inefficiency, reluctance of the auditor, non-compliance with the auditor's professional ethics, economic environment and communication problems and coordination of challenges and barriers to using expertise services were identified and rules and regulations improvement, strengthening infrastructure and promoting and developing expertise services, strategies to improve the use of expert services were identified. The results of the research can be useful in order to achieve effective use of experts in the audit process and as a result higher audit quality.
