نوع مقاله : مقاله پژوهشی

نویسندگان

• عباس افلاطونی ¹
• محمد خطیری ²

¹ گروه حسابداری، دانشکده علوم اقتصادی و اجتماعی، دانشگاه بوعلی سینا، همدان، ایران

² گروه حسابداری، دانشگاه آزاد اسلامی، واحد تاکستان، تاکستان، ایران

چکیده

مدیریت سود از طریق تغییر طبقه‌بندی اقلام صورت سود و زیان موضوعی است که در سال‌های اخیر موردتوجه پژوهشگران قرارگرفته و در پژوهش‌های داخلی نیز به‌صورت محدود به آن پرداخته شده است. به‌علاوه، با آن‌که پژوهش‌های خارجی تأثیر همه‌گیری کووید 19 بر مدیریت سود را موردتوجه قرار داده‌اند؛ در پژوهش‌های داخلی شواهد تجربی خاصی در خصوص شرکت‌های ایرانی ارائه نشده است. در این راستا، پژوهش حاضر وجود پدیدۀ مدیریت سود از طریق تغییر طبقه‌بندی را بررسی کرده و آن را در سال‌های شیوع کووید 19 و سایر سال‌ها، مقایسه نموده است. برای این منظور، از داده‌های 137 شرکت پذیرفته‌شده در بورس اوراق بهادار تهران در بازۀ زمانی 1402-1391 (1644 مشاهده) استفاده شده است. در برازش مدل‌ها، ضمن کنترل اثرات سال‌ها و صنایع، رویکرد حداقل مربعات تعمیم‌یافته به‌کاررفته است. نتایج پژوهش مؤیّد وجود پدیدۀ مدیریت سود از طریق تغییر طبقه‌بندی در شرکت‌های ایرانی است. افزون بر آن، یافته‌ها نشان می‌دهد که در قیاس با سایر سال‌های موردبررسی، در دورۀ شیوع کووید 19، مدیریت سود از طریق تغییر طبقه‌بندی شدّت یافته است. نتایج آزمون‌های استحکام با به‌کارگیری دورۀ زمانی متفاوت برای شیوع کووید 19 و استفاده از مقادیر رتبه‌ـ دهکی متغیرها، مؤید یافته‌های اصلی پژوهش است

کلیدواژه‌ها

• کووید 19
• تغییر طبقه‌بندی
• مدیریت سود حسابداری
• مدیریت سود واقعی

موضوعات

• حسابداری مالی

عنوان مقاله [English]

COVID-19 and Earnings Management through Classification Shifting

نویسندگان [English]

• Abbas Aflatooni ¹
• Mohamad Khatiri ²

¹ Department of Accounting, Faculty of Economics and Social Sciences, Bu-Ali Sina University, Hamadan, Iran

² Department of Accounting, Takestan Branch, Islamic Azad University, Takestan, Iran

چکیده [English]

Recent research has increasingly focused on earnings management through the classification shifting of income statement items. However, domestic studies have only minimally addressed this topic. While international research has extensively examined the impact of the COVID-19 pandemic on earnings management, there is a notable lack of empirical evidence concerning Iranian firms. This study investigates the presence of earnings management through classification shifting in Iranian firms, comparing the phenomenon during the COVID-19 outbreak with other periods. The analysis utilizes data from 137 firms listed on the Tehran Stock Exchange, covering 2012 to 2023, resulting in 1,644 observations. The models are estimated using the generalized least squares (GLS) approach, controlling for year and industry effects. The findings confirm the existence of earnings management through classification shifting among Iranian firms. Moreover, the results indicate that this practice intensified during the COVID-19 pandemic compared to other years. Robustness tests, which employed different time frames for the pandemic and decile-ranked values for research variables, corroborate the study's main findings.
 

Introduction

Research on earnings management surged following Enron's collapse in 2003, focusing on accrual-based earnings management, real earnings management, and classification shifting. Managers use accruals, manipulate business activities, and reclassify income statement items to influence reported earnings. Most studies have concentrated on accrual-based and real earnings management, with limited attention given to classification shifting.
The COVID-19 pandemic profoundly impacted earnings management by increasing financial distress and firms’ reliance on external resources, thereby motivating firms to present more favorable financial images. While evidence from developed countries highlights the pandemic's impact on earnings management, research on Iranian firms remains scarce.
This study aims to fill this gap by examining classification shifting among Iranian firms and assessing the influence of COVID-19. It contributes to the earnings management literature by providing empirical evidence of classification shifting in the Iranian context. Furthermore, it enhances the existing literature on the impact of macroeconomic events and crises by demonstrating the intensifying effect of COVID-19 on classification shifting. In light of the above, the objective of this research is to examine the impact of COVID-19 on earnings management through the classification shifting of income statement items.

Literature Review

According to McVay (2006) and Saghafi and Jamalianpour (2018), managers can unexpectedly increase operating income by reclassifying operating expenses as non-operating expenses and non-operating income as operating income, thereby reporting lower non-operating income. In fact, a positive relationship between the size of the reduction in non-operating income and the increase in unexpected operating income can indicate the existence of classification shifting aimed at earnings management. On the other hand, since the phenomenon of earnings management has intensified during the COVID-19 pandemic (Deloitte, 2020; Chen et al., 2023), it is predicted that the COVID-19 outbreak will strengthen the positive relationship between the size of the reduction in non-operating income and the increase in unexpected operating income. To examine this issue, the first hypothesis of the research is formulated as follows:
Hypothesis I: With the outbreak of COVID-19, the positive relationship between the size of the reduction in non-operating income and unexpected operating income for the current year is strengthened.
There might be ambiguity regarding whether the positive relationship between reduced non-operating income and unexpected operating income is due to actual economic changes or opportunistic managerial behavior (McVay, 2006). McVay (2006) clarifies that if opportunistic classification shifting increases operating income in one year, it will not do so the following year if not repeated, leading to lower unexpected operating income. Conversely, if the change is due to real economic factors, the increase will persist. A negative relationship is expected between reduced non-operating income and changes in unexpected operating income the following year, an effect that may be intensified by COVID-19 (Taylor et al., 2023). The second research hypothesis is formulated to examine this:
Hypothesis II: With the outbreak of COVID-19, the negative relationship between the size of the reduction in non-operating income for the current year and changes in unexpected operating income for the following year is strengthened.

Methodology

In this study, data were collected from the Rahavard Novin database and Codal website and analyzed using Stata software. The generalized least squares (GLS) approach was used to estimate the models while controlling for the fixed effects of years and industries. Clustering correction at the firm level was applied to control for heteroscedasticity and autocorrelation of errors. Rank-decile values of variables were used in robustness tests to control for outliers and non-linear relationships. The statistical population included all firms listed on the Tehran Stock Exchange from 2012 to 2023, excluding those in insurance, banking, financial investment, holding, and leasing industries. Firms with fiscal years ending in March and no changes during the study period were selected, resulting in 137 firms (1,644 firm-years) across 13 industries. Data from three prior periods (2009-2011) were also used, with variables winsorized at the 1st and 99th percentiles.

Results

The results indicate that, with the outbreak of COVID-19, both the positive relationship between the size of the reduction in non-operating income and unexpected operating income, and the negative relationship between the size of the reduction in non-operating income and changes in unexpected operating income, have been strengthened. These results are consistent with the first and second hypotheses of the research, respectively.

Discussion

While academic literature often focuses on earnings management through discretionary accruals and real business activities, it has largely overlooked classification shifting. Domestic research in this area is also scarce. The first part of this study indicates that classification shifting is common among Iranian firms. Although studies in developed countries show COVID-19's impact on accrual-based and real earnings management, there is limited empirical evidence from Iran. The second part of the study reveals that classification shifting intensified during the COVID-19 pandemic, consistent with findings from Hsu and Yang (2022), Yan et al. (2022), Aljughaiman et al. (2023), and Taylor et al. (2023).

Conclusion

Given the research findings indicating the prevalence of earnings management through classification shifting and the increasing effect of COVID-19, shareholders and investors should, especially during crises, avoid behavioral consistency and anchoring on net and operating income figures. They should carefully examine classification shifts in financial statements and use more comprehensive analyses that include non-operating items to obtain a more accurate picture of financial performance during crises. Auditors should design specific tests to identify earnings management through classification shifting and enhance review quality during crises. External regulatory bodies should not reduce supervision but instead implement stricter regulations to oversee financial report quality and disclosure, ensuring firms provide greater transparency. Less supervision and less transparent reporting can exacerbate economic fluctuations during crises. These measures can help maintain and increase transparency and trust in financial markets and ensure optimal use of resources.
 
 
 
 

کلیدواژه‌ها [English]

• Accounting earnings management
• Classification Shifting
• COVID-19
• Real earnings management