Document Type : Research Paper

Authors

• Mahdi Saghafi ¹
• Azam Pouryousof ¹
• Fatemeh Dastgerdi ²

¹ Assistant Professor, Department of Accounting, Payame Noor University, Iran

² MSc Accounting, Department of Accounting, Payame Noor University, Iran

Abstract

The aim of the present research is to examine the impact of the heterogeneity of knowledge among board members on the Optimistic tone of explanatory reports, as well as to investigate the mediating role of earnings management in this relationship In fact, it is expected that differences in the characteristics of the management team of a company may influence the quality of both quantitative and qualitative financial reports To test the research hypotheses, panel data from 125 companies listed on the stock exchange over a 9-year period (from 2014 to 2021) were used The estimation of the research models using multivariate regression shows that the heterogeneity of managers' knowledge positively and significantly affects the Optimistic tone of explanatory reports, and earnings management also has a positive and significant impact on the Optimistic tone of managers' explanatory reports Ultimately, earnings management can play a mediating role in the relationship between the heterogeneity of managers' knowledge and the Optimistic tone of explanatory reports The results of this study provide a different perspective on the role of the executive management team in companies and offer valuable insights for the existing literature on the strategic leadership role of senior managers and the disclosure of annual board reports

Keywords

• Heterogeneity of managers'
• knowledge, Tone of explanatory reports, Earnings management, Financial reporting

Main Subjects

• stock exchange