Empirical Studies in Financial Accounting

Abstract The importance of human capital (HC) is a broadly accepted concept and human capital financial reporting as the traditional concept of "human resource accounting", has a long history. However, human capital financial
reporting is still an unresolved problem in reporting which makes the investigation of human capital reporting quality an important issue. The research provides evidence on the value relevance and information content
of "Capital-Based Human Capital Financial Reporting Model". For this purpose, we utilized the value relevance models as an experimental framework. Using cluster sampling, we chose and examined 22 corporations,
from 2011 to 2015. We utilized OLS to test our research hypothesis. The results indicated that capital-based model is relevant for measuring and reporting Iranian corporations' HC. After verifying the relevance
characteristic using a quasi-experimental method, the information content of the model was examined by applying four-group experimental design with pretest and posttest at a higher level. The results of this experiment performed in controlled conditions and with the help of graduate accounting students of Allameh Tabataba'i University revealed that there are no significant difference between experimental and control groups' responses, and therefore there is no additional information content 

Abstract Auditing quality has special importance for financial statement’s users,
managers, and auditors. The aim of this study is to model the relationship
among auditing quality factors and investigating the effect of mutual
relationship among its related variables. For this purpose, 101 firms listed in
Tehran Stock Exchange (TSE) were selected for a period of 11 years (2004
to 2015). The research method is based on the cause and effect model in
system dynamics. The data was collected using financial statements and
Rahavard Novin databases. The test of normality, unit root test, correlation
and hypothesis testing (multiple regression, partial regression, ARCH
functions as required) was applied by SPSS version 23 and Eviews version
9. The results showed that Standards Compliance and Professionalism, Audit
Fees, Auditor firm Size, Auditor’s Reputation, Number of Paragraphs in
Audit Report, Percentage of misrepresentations and noncompliance, Audit
Opinion Type, Delay in the Audit Report, Auditor’s Tenure, and Auditor's
Expertise and Industry Knowledge have mutual effects on each other. This
model is newfound in auditing literature of Iran. It is also a practical and
accurate auditing quality model useful for stakeholders in decision making.

Abstract Cost stickiness denotes the asymmetric response of costs to sales increases
versus sales decreases. In this paper, we also consider the concept of cost
anti-stickiness. Cost anti-stickiness happens when the decrease of costs in
case of a fall in sales is more than the increase of costs due to an equal rise in
sales. This phenomenon happens because of existence of optimistic
managers in past years and inefficient stickiness cause of sales volatility
against manager’s expectation.
This paper examines the cost stickiness and anti-cost stickiness of nonmanufacturing
costs in Iranian firms using panel data analysis. The sample
includes 229 publicly-traded firms listed in Tehran Stock Exchange. Using
data for 2012-2015, the results showed that not only do the nonmanufacturing
costs have stickiness behavior but also they have antistickiness
behavior that occurs due to the changes in the sales in the previous
years.

Abstract Investigating the Effect of Correlation between Firms'''''''''''''''' Earnings and Announcement Timing on the Accruals

Abstract Using structural equation modeling approach, this research aims to explore
the effect of political costs on financial reporting quality. For this purpose,
66 publicly-listed firms from Tehran Stock Exchange for the period 2006 to
2014 were selected as the final data set. As an independent variable, the
observable variables such as capital intensity, concentrate rate, tax ratio, firm
size, employee intensity, and risk were used to proxy the political cost. In
addition, quality of accruals, disclosure quality, earnings persistence, and
accuracy of financial information were used to measure financial reporting
quality which is dependent variable and growth opportunities and leverage
were considered as control variables. The results indicated that political costs
had a negative and meaningful effect on financial reporting quality.

Abstract One of the concepts which recently have been discussed a lot by corporate
governance regulators and standard setters is related party transaction. Related party
transaction due to the complexity in recognition and disclosure are considered to be
one the challenges of financial reporting which can influence economic decisions of
users. Considering the expansion of related party transactions and the increase of
them in companies, it is necessary to create monitoring mechanisms to reduce the
financial frauds and to improve the performance. Among these types of monitoring
mechanisms, stablishing and performing of proper corporate governance system in
companies is one of these mechanisms. The empirical evidences show that corporate
governance lessens related party transaction. In this research, the relationship
between the mechanisms of corporate governance and related party transactions is
investigated. The study sample includes 136 Tehran Stock Exchange listed
companies from 1389 to 1393. In order to test the research hypotheses, the multivariable
regression model with a data panel was used. The board members
independences, boards compensation, stock ownership, change of executive
manager, auditor rotation were used as the corporate governance mechanisms. The
result of the research indicates that there is a significant and reverse relation between
related party transaction and ownership of the institutional stockholders and change
of executive manager. There is a reverse relation between related party transaction
and autonomy of board of managers’ members but this reverse relation is not
significant statistically. There is a direct and significant relation between related
party transaction and board of managers’ compensation and there is a direct relation
between related party transaction and auditor rotation, which is not significant
statistically.

Abstract In this study, the effect of audit quality on the forecasting accuracy of future
operating cash flows of firms listed in the Tehran Stock Exchange has been
investigated. Audit quality has been measured with auditor size, auditor
industry specialization and auditor tenure. Similar to some previous
researches done in this outline, forecasting accuracy of future operating cash
flows have been estimated with using model Barth et al (2001). The results
of review firms 97 in the years 2007 to 2014 show that size of audit firm and
auditor industry specialization have significant positive relationship at the
forecasting accuracy of future operating cash flows, and increase forecasting
accuracy. while there is a significant negative relationship between
forecasting accuracy of future operating cash flows and auditor tenure. These
findings suggest that audit quality can influence the quality of accounting
information and therefore effected over forecasting accuracy of future
operating cash flows.

Abstract The significance and critical role of human capital (HC) is broadly accepted. Human capital financial reporting as the classic "human resource accounting", has a long history. As a result, many methods have been proposed for HC measuring and reporting. Given that the HC financial reporting is still an unsolved problem, it is important to evaluate the quality of HC measurement and reporting models. The research offers evidences about the relevance and information content of "Capital-Based Human Capital Financial Reporting Model". For this purpose, we utilized the value relevance models as an experimental framework. Using cluster sampling, we chose and examined 22 corporations, from 2011 to 2015. We utilized OLS to test our research hypothesis. The results indicate that capital-based model is relevant for measuring and reporting Iranian corporations' HC. After verifying the relevance characteristic using a quasi-experimental method, at a higher level, information content of the model was examined by applying four-group experimental design with pretest and posttest. The results of this experiment, performed in controlled conditions and with the help of graduate accounting students of Allameh Tabatabai University, show no significant difference between experimental and control groups' responses, and therefore no additional information content.

Abstract Auditing quality has special importance for financial statement’s users, managers and auditors. The aim of this study is modeling the relationship among auditing quality factors and investigating the effect of mutual relationship among its related variables. For this purpose, 101 firms listed in Tehran Stock Exchange (TSE) were selected for a period of 11 years (2004-2015). Research method is based on the cause and effect model in the system dynamics. Data collected via using financial statements and Rahavard Novin version 3 software. Test of normality, unit root test, correlation, and hypothesis testing (multiple regression, partial regression, ARCH functions as required) were applied by SPSS version 23 and Eviews version 9. Results showed that “Respect of Standards and Professional Performance”, “Audit Fees”, “Auditor’s Size”, “Auditor’s Reputation”, “Number of Matter Paragraphs in Auditing Report”, “Percentage of Discovered and Reported Distortions”, “Audit Opinion”, “Delay in the Audit Report”, “Auditor’s Tenure”, “Auditor's Expertise and Industry Knowledge” will have mutual effects on each other.

Abstract Abstract
declaration of Accounting profit Or any of the published information, if it is properly be published between capital investors, to a large extent reduce the information asymmetry. In this paper, the relationship between Relative earnings performance and discretionary accruals firms were studied in Tehran Stock Exchange.The aim of this study was to evaluate The effect of firm-industry earnings correlation and announcement timing on firms’ accrual decisions used by the management of the company. The study period from 1387 to 1392 included 108 companies. The results showed a negative significant relationship between discretionary accruals and the relative performance of the company's earnings. Also, the results showed that those companies that their earnings had high correlation with industry earnings and had a low relative performance possess stronger relationship between discretionary accruals and the relative performance earnings. But the delay in the announcement of the company's profits is not a factor in the identification of the possible adjusted discretionary accruals in order to manage earnings.

Abstract In this study, the effect of audit quality on the forecasting accuracy of future operating cash flows among between firms listed in the Tehran Stock Exchange has been investigated. Audit quality has been measured with auditor size, auditor industry specialization and auditor tenure.Similar to some previous researches done in this outline, forecasting accuracy of future operating cash flows have been estimated with using model Barth et al (2001). The results of review firms 97 in the years 2007 to 2014 show that size of audit firm and auditor industry specialization have significant positive relationship at the forecasting accuracy of future operating cash flows, so caused increase its .while there is a significant negative relationship between forecasting accuracy of future operating cash flows and auditor tenure. These findings suggest that audit quality can influence the quality of accounting information and therefore it is effected over forecasting accuracy of future operating cash flows.

Abstract Political Hypotheses (Political Costs) and Financial Reporting Quality: Empirical Evidence from Tehran Stock Exchange
Abstract
Using structural equation modeling approach, this research aims to explore the effect of political costs on financial reporting quality. For this purpose, 66 publicly listed firms from Tehran Stock Exchange for the period 2006 to 2014 are selected as final data set. As an independent variable, the observable variables such as capital intensity, concentrate rate, tax ratio, firm size, employee intensity and risk are used to proxy the political cost. In addition, quality of accruals, disclosure quality, earnings persistence and accuracy of financial information are used to measure financial reporting quality which is depend variable and growth opportunities and leverage are considered as control variables. The results indicate that political costs have a negative and meaningful effect on financial reporting quality.

Keywords: Political Hypotheses, Political Costs, Financial Reporting Quality, Structural Equation Modeling Approach.
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