Allameh Tabataba’i University Empirical Studies in Financial Accounting 2821-0166 19 75 2022 09 23 Investigating the Effect of Constraints on Earnings Management Strategies on the Application of Earnings Classification Shifting Strategy Investigating the Effect of Constraints on Earnings Management Strategies on the Application of Earnings Classification Shifting Strategy 203 236 14946 10.22054/qjma.2022.67557.2375 FA Mohsen Imeni Assistant Professor, Department of Accounting, Ayandegan Institute of Higher Education, Tonekabon, Iran. 0000-0003-1863-4995 Seyyed Mohammad Moshashaei Assistant Professor, Accounting Department, Gilan University, Rasht, Iran. 0000-0002-1089-8104 Journal Article 2022 05 16 The two approaches are more prominent in the accounting literature, accrual-based earnings management and manipulating the actual activities however, the present study is considered the third type of earnings management model, namely a classification shifting. The purpose of this study is to investigate the effect of constraints on earnings management strategies on the application of shifting strategy in earnings classification in the Iranian capital market. The research sample consisted of 114 firms from 2013 to 2021 (1026 observation). Logistic regression models have been used to test research hypothesis. The results of the study show that financial health, institutional shareholders, audit firm size and market share have a negative and significant effect on the classification shifting. Also, the operating cycle has a positive and significant effect on the c classification shifting; and its tenure does not have a significant effect on the classification shifting. Additional tests indicated large companies have a greater incentive to do classification shifting (a form of earnings management) compared to small companies, because they have greater political costs. The two approaches are more prominent in the accounting literature, accrual-based earnings management and manipulating the actual activities however, the present study is considered the third type of earnings management model, namely a classification shifting. The purpose of this study is to investigate the effect of constraints on earnings management strategies on the application of shifting strategy in earnings classification in the Iranian capital market. The research sample consisted of 114 firms from 2013 to 2021 (1026 observation). Logistic regression models have been used to test research hypothesis. The results of the study show that financial health, institutional shareholders, audit firm size and market share have a negative and significant effect on the classification shifting. Also, the operating cycle has a positive and significant effect on the c classification shifting; and its tenure does not have a significant effect on the classification shifting. Additional tests indicated large companies have a greater incentive to do classification shifting (a form of earnings management) compared to small companies, because they have greater political costs. https://qjma.atu.ac.ir/article_14946_15bc005c266883ec57a2fae120a349b3.pdf