Document Type : Research Paper

Authors

• Reza Malek ¹
• Hossien fakhari ²

¹ Ms student of accounting at the university of mazandaran

² full professor of Accounting at the university of Mazandaran

Abstract

Abstract

The great impact of politics on the capital market has caused a large share of accounting and financial research to be linked with political issues. For this reason, the current research tries to investigate the effect of the presidential election on the earnings mmanagement by considering the moderating role of ownership structure due to its importance. For this purpose, the data related to 122 companies listed in the Tehran Stock Exchange was gathered by systematic elimination method during 2005-2022 and analyzed by multivariate regression method. The findings have shown that the presidential election has a negative and significant effect on the accrual and real earnings managment. Also, by separating the industries based on "political" characteristics, it was shown that in the years of presidential elections, political industries manage Earnings through accrual Earnings management and non-political industries through real Earnings management. Also, the findings have shown that the ownership structure (the amount of ownership of institutional stockholers) does not have a moderating role in the effect of the presidential election on the management of accrual and real Earnings. These findings show that in companies during the presidential election, due to the increased sensitivity and supervision of various social and political institutions, the "political costs" on the performance of managers increases, and this increase leads to a decrease in Earnings management (accrual and real).

Keywords

• Presidential election
• Ownership structure
• Earnings management
• Political control
• Political cost

Main Subjects

• Financial Accounting