Financial Accounting
Alireza Javadipour; jafar Babajani; Ghasem Blue; Vajhollah Ghorbanizadeh
Abstract
Considering the goals of forming the audit committee and its extensive duties, evaluating the performance of the audit committee in order to identify its strengths and weaknesses is very important. The present study presents a model for evaluating the performance of the audit committee and a practical ...
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Considering the goals of forming the audit committee and its extensive duties, evaluating the performance of the audit committee in order to identify its strengths and weaknesses is very important. The present study presents a model for evaluating the performance of the audit committee and a practical model for the use of the activities of the audit committee by the beneficiaries. The model obtained in the current research includes 3 parts of evaluating the individual characteristics of the members of the audit committee, evaluating the work processes and reporting of the audit committee, and evaluating its duties and responsibilities, and the final model includes 3 dimensions, 13 components, and 78 indicators. The results of the research showed that the working and reporting processes of the audit committee have the most weight in evaluating the performance of the audit committee, and the evaluation of the audit committee meetings as the focus of the audit committee's activities is the most important among the performance evaluation components.ObjectiveThe optimal performance of the audit committee is an important variable in improving the processes and structure of corporate governance as well as financial reports. The duties of audit committees around the world are in sync with developments in the economic environment, and in Iran, according to the approved charter of the audit committee, the purpose of forming an audit committee in companies is to help fulfill the supervisory responsibility of the board of directors and to improve it in order to obtain assurance of reasonable quality of financial reporting, effectiveness of the internal audit process, ensuring the independence of the independent auditor and its effectiveness, adapting the company's activities to the laws, and ensuring the effectiveness of the activities of the corporate governance system, its committees, and other components. Considering the goals of forming the audit committee and its extensive duties, evaluating the performance of the audit committee in order to identify its strengths and weaknesses is very important. Due to the lack of comprehensive research in the country to provide a model to evaluate the performance of the audit committee, the present research has addressed this issue and a practical model for the use of the activities of the audit committee has been presented.MethodThe research method used in the first stage of the study involved extracting the dimensions, components, and performance evaluation indicators of the audit committee from the theoretical sources of the research. Then, the Fuzzy Delphi method was used to screen the indicators, and the Best-Worst Method (BWM) multi-criteria decision-making method was used to weigh each dimension, component, and index. Finally, to determine the gap between the existing situation in the field of audit committee performance evaluation and the model obtained in the current research, the Fuzzy Gap method has been used.FindingsBy studying the theoretical sources of the research, 96 indicators were determined to evaluate the performance of the audit committee, which were classified into 3 dimensions and 15 components using theoretical foundations. In the next step, to check the indicators, interviews were first conducted with 10 experts. In the interviews conducted regarding 6 indicators, revisions, and content adjustments were made to adapt to the current conditions of the country's economic environment. One index was also removed due to the lack of a legal structure for the index in Iran. In the next step, 95 finalized indicators were presented to the research experts for screening, and the responses given by the research experts were analyzed using the Fuzzy Delphi method. By calculating the fuzzy average of the numbers and then de-fuzzifying them, indicators with a de-fuzzified number less than 0.7 were removed, and 78 indicators were approved by the research experts. The model obtained in the current research includes three parts: evaluating the individual characteristics of the members of the audit committee, evaluating the work processes and reporting of the audit committee, and evaluating its duties and responsibilities. The final model includes 3 dimensions, 13 components, and 78 indicators.4- ConclusionAccording to the findings of the research, the important components in evaluating the performance of the audit committee are the audit committee meetings, the audit committee resources, communication with the board of directors, the audit committee charter, and monitoring of financial reporting. The results of the research showed that the working and reporting processes of the audit committee carry the most weight in the evaluation of the audit committee's performance, with a weight of about 66%, and the evaluation of the audit committee meetings as the focus of the audit committee's activities is the most important among the evaluation components. Also, proper communication with the board of directors, provision of sufficient resources for the activities of the audit committee, the existence of an approved charter of the audit committee, and monitoring of internal controls and financial reporting are important areas for evaluating the performance of the audit committee. The results of the research also indicated the existence of a significant gap between the current status of the audit committee's performance evaluation and the model obtained in the research. In this regard, it is suggested that the legislator (Securities and Exchange Organization) obliges the listed companies to evaluate the performance of the audit committee under their supervision. Furthermore, it is recommended to use the model presented in the current research, considering the importance of dimensions and components. Additionally, the board of directors of the companies can improve the performance of these committees by taking into account the important components of the audit committee's performance, by holding the audit committees under their supervision accountable in these areas, and also making a reasonable and logical assessment of their performance.Enhancing KnowledgeThis research has presented a practical model to evaluate the performance of the audit committee according to the characteristics of Iran's economic environment, which can serve as the basis for analyzing the performance of the audit committee based on its different functional dimensions.
Financial Accounting
Javad Shekarkhah; Mohammad javad Salimi; Seyed Soroush Ghazinoori; Ali Hedayati Bilondi
Abstract
AbstractPension funds in Iran use a defined benefit pension plan, and their sustainability is important. However, the evaluation of their sustainability has always been criticized. Minimum reporting and simple accountability indicators do not meet the informational needs of stakeholders. Thus, the main ...
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AbstractPension funds in Iran use a defined benefit pension plan, and their sustainability is important. However, the evaluation of their sustainability has always been criticized. Minimum reporting and simple accountability indicators do not meet the informational needs of stakeholders. Thus, the main issue is to identify the indicators and standards for a comprehensive evaluation of financial sustainability. To address this issue, the theoretical foundations of sustainability evaluation of pension funds and the indicators applied by other countries and international organizations were examined. The indicators were presented to experts for receiving their opinions and, to reach a consensus on key indicators, a Fuzzy Delphi method was applied. For ranking and developing a combined indicator, the final indicator was obtained using experts' opinions and the SWARA method. 27 indicators in four dimensions were extracted from the theoretical foundations: equity, adequacy, financial, and innovation. According to the results of the Fuzzy Delphi method, 15 key indicators were finally confirmed. Among the key indicators, the support ratio obtained the first rank, while the replacement rate and penetration coefficient obtained the second and third ranks, respectively. The results of the SWARA method confirmed the combined indicator consisting of the equity dimension (1 sub-indicator), the adequacy dimension (3 sub-indicators), and the financial dimension (11 sub-indicators). The weight of equity, adequacy, and financial in the combined indicator is equal to 6%, 21%, and 73%, respectively. The support ratio, the present value of the Assets to Liabilities Ratio, and the actuary analysis obtained ranks 1 to 3. According to the combined indicator, the financial dimension has the highest importance, and despite difficulties such as a lack of resources and liquidity to pay current obligations, attention is focused on equity, adequacy, and innovation. However, combined indicators should always be reviewed.IntroductionOne of the challenges faced by pension funds and stakeholders in this system is how to assess financial sustainability and reporting. The governance structure, stakeholder relations, management, and accountability of pension funds necessitate attention to the evaluation of sustainability. Occupational pension schemes must provide necessary information regarding retirement plans. The information should be presented in a way that stakeholders can monitor and assess the financial health of occupational pension schemes and determine whether they are capable of fulfilling their contractual obligations. International organizations generally use indicators that are based on accessible information from different countries and therefore have the highest utility for comparison.In recent years, combined indicators have become one of the most commonly used analytical tools in many fields of social realities. Combined indicators have been widely accepted as useful tools for decision-making and information communication. Combined indicators are a combination of simple indicators with specific weights, where the weights indicate the relative importance that each of them should have in the final overall indicator. Determining the simple and combined indicators for assessing financial sustainability requires a precise understanding and attention to the characteristics of retirement plans, as these characteristics will vary from one organization to another and across different retirement schemes. This research aims to investigate and study the indicators used by international organizations and other countries, providing a scientific basis for evaluating and reporting the financial sustainability of pension funds.MethodologyConsidering the objective of the research, it is of an applied nature. In terms of implementation, this research is field-based. The research is of a mixed nature, meaning it consists of two components: qualitative and quantitative. The research, in terms of data collection, is conducted in a real and unadulterated manner and falls into the category of descriptive (non-experimental) research with a survey and exploratory approach. To properly conduct the research and achieve scientific results, four main stages of development and actions have been undertaken.The first stage involves reviewing and studying the theoretical foundations of evaluating the financial sustainability of pension funds and the indicators used in other countries, as well as identifying evaluation models used by international institutions to access proposed indicators, seek expert opinions, and obtain consensus on them. The second stage includes seeking expert opinions on the extracted key indicators from the theoretical foundations of the research to select acceptable indicators based on the conditions of Iranian pension funds. The Fuzzy Delphi method was used to seek expert opinions. In the third stage, the SWARA method was used to determine the weights of key indicators. Finally, in the last stage of the research, the findings and results are compared and aligned with the combined indicators used by other countries and international institutions. Results and DiscussionThis study analyzes a significant number of indicators of pension system sustainability. In conducting this research, using literature and scientific texts, the indicators for evaluating the sustainability of pension funds were identified in terms of adequacy (6 indicators), equity (4 indicators), financial (14 indicators), and innovation (3 indicators). Based on the consensus of experts, key indicators were finalized in three dimensions. The results indicate a combined indicator consisting of the dimensions of equity (1 sub-indicator), adequacy (3 sub-indicators), and the financial dimension (11 sub-indicators). In the next stage, using the SWARA method, weights were assigned to each of the indicators. Based on the ranking performed in the combined indicator, the equity dimension, including one indicator (implicit pension debt), accounts for 6% of the weight of the combined indicator. The adequacy dimension, composed of indicators such as replacement rate, asset growth rate, and asset growth rate to inflation ratio, accounts for approximately 21% of the weight of the combined indicator. Lastly, the financial dimension, being the most influential, accounts for 73% of the weight of the combined indicator and includes indicators such as population coverage ratio, support ratio, dependency ratio, consumption-to-resource ratio, consumption growth rate-to-resource ratio, current asset value-to-obligations ratio, accumulation rate, insurance contribution-to-pension payment ratio, actuarial analysis, economic dependency ratio of the elderly, and funding ratio. Considering the obtained combined indicator, it can be stated that the financial dimension indicators have the highest importance, followed by the sub-indicators of the adequacy dimension.ConclusionThe results of this study indicate that reporting and evaluating the financial sustainability of pension funds have faced challenges, including the lack of consensus on evaluation indicators. Published reports on the status and financial performance of pension funds have not been aligned with the characteristics of pension funds and stakeholder needs. Additionally, it is observed that some of the theoretical indicators mentioned in the literature do not correspond with the indicators used by international organizations (particularly the actuarial ones). According to the combined indicator, the financial dimension has the highest importance, and despite difficulties such as lack of resources and liquidity to pay current obligations, attention is focused on equity, adequacy, and innovation. However, combined indicators should always be reviewed.To address the existing issues at the operational, supervisory, and standard-setting levels, sufficient and effective measures need to be taken to advance the goals of sustainability assessment and reporting. Standard-setting organizations in the field of sustainability can play a crucial role in enhancing sustainability knowledge through educational development. At the organizational level, strong official support and senior management commitment are required for the development of sustainability assessment processes, and necessary training should be provided. It is important to pay more attention to the concepts and indicators of sustainability assessment to foster a better mindset towards sustainability and reporting. Regulatory bodies and stakeholders should employ innovative approaches in their assessments, including the performance of pension funds. The use of simple indicators may not provide sufficient information, so it is better to utilize combined indicators and update them to align with the characteristics of the pension fund's operating environment.
Accounting and various aspects of finance
Amir Moradi; hamideh asnaashari; Mohammad Hossein Rohban; Mohammad Arabmazar Yazdi; MohammadHosien SafarZade
Abstract
Design Science Research Methodology (DSRM) is a solution-oriented approach for conducting research that transcends mere understanding of existing situations, aiming to generate innovative and novel artifacts to realize desired outcomes. Despite its widespread use in other technical and managerial domains, ...
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Design Science Research Methodology (DSRM) is a solution-oriented approach for conducting research that transcends mere understanding of existing situations, aiming to generate innovative and novel artifacts to realize desired outcomes. Despite its widespread use in other technical and managerial domains, and more than two decades since the first exploration of DSRM in accounting literature, its true potential went largely unrecognized until the recent years, when it gained unprecedented recognition from accounting researchers. In this pioneering research, we analyze trends, identify influential figures, and map the intellectual and conceptual landscape of accounting research related to DSRM. Utilizing co-word analysis, co-authorship techniques, as well as scientific mapping and word cloud visualization, we scrutinize 51 articles from journals indexed in the most recent Australian Business Deans Council (ABDC) list from 2023. Our findings reveal that more than half of the research output is concentrated in the four-year period spanning from 2020 to 2023, signaling a growing interest among accounting researchers in this methodology. The dominant subject areas in design science articles are audit and control, coupled with the integration of emerging technologies and data analytics techniques. The most cited work is Guido Geerts (2011) paper, "A design science research methodology and its application to accounting information systems research" with 140 citations in the Scopus database alone. The most prolific author, Miklos Vasarhelyi, has authored six articles and boasts the most scientific connections with other researchers in this field. The State University of New Jersey, USA, where Vasarhelyi is affiliated, stands as the most prolific institute with eight articles. Guido Geerts receives 177 references from his two articles, earning him the title of the most cited author in the realm of design science in accounting research, while the University of Delaware, where he is affiliated, is also the most cited university. Among countries contributing to this field, the United States leads with the highest number of productive articles and references, totaling 33 articles and 555 references. The International Journal of Accounting Information Systems has published the most articles (20) and received the most references (464). The findings of this research illuminate bibliographic factors, relationships, and thematic orientations within design science research in accounting. They inform researchers and policymakers about the current status and trajectory of this methodology, providing a foundation for the advancement of solution-oriented and applied research in the field of accounting. IntroductionApplied research that seeks solutions to practical issues cannot be pursued through natural science research methods as they aim to design and implement solutions to improve the current situation. For this purpose, the methodology of design science (Simon, 1996) was introduced. Although accounting is a practical field of knowledge, this methodology is less known and utilized in accounting, until the last five years, when it was embraced by accounting and auditing researchers. Thus, in this study, we investigate the bibliometric factors and trends in accounting research using the design science research methodology (DSRM) to answer the following questions:RQ1: What are the main topics of articles related to design science research methodology?RQ2: What are the emerging topics in design science research in accounting?RQ3: Which are the most cited articles, the most prolific authors, the most prolific universities, the most prolific journals, and the most prolific countries in DSRM in accounting?Literature reviewDSRM is a research methodology that focuses on problem-solving (March & Storey, 2008), and its purpose is to create and evaluate artifacts that are used to solve organizational problems through transforming the current state into a desired state (Hevner et al., 2004; March & Smith, 1995; March & Storey, 2008). Considering the focus of this science on problem-solving, the application of design science research can potentially reduce the existing gap between theory and practice (Aken, 2004, 2005; Romme, 2003). MethodologyBibliometric analysis is the application of quantitative techniques (e.g., citation analysis) to bibliometric data (e.g., publication and citation units) (Broadus, 1987; Pritchard, 1969). Researchers apply bibliometric analysis for various reasons, such as discovering emerging trends in the performance of articles and journals, collaboration patterns among authors and research components, and discovering the intellectual structure of a specific field in existing literature (Donthu et al., 2021).In this research, in the first step, the Scopus database was used due to the inclusion of more scientific documents than other databases (Echchakoui, 2020). Then, the relevant keywords were identified and selected, and by setting the query phrase, applying it to the Scopus database and performing the necessary filters, a total of 58 articles from the journals ranked in 2023 rankings by the Australian Business Deans Council (ABDC) were obtained. This number decreased to 51 articles as the basis of analysis after reviewing the content by the authors and discarding unrelated articles. In this research, the VOSviewer software (Eck & Waltman, 2021) was chosen for bibliographic data analysis and visualization. Also, the matplotlib and wordcloud libraries in Python programming language were used for drawing wordcloud, and Microsoft Excel software was used for drawing trend charts.ResultsOur findings reveal that approximately half of the research output is concentrated in the four-year period from 2020 to 2023. The dominant subject areas in design science articles are audit and control, coupled with the integration of emerging technologies and data analytics techniques. The most cited work is Geerts (2011) paper, ‘A design science research methodology and its application to accounting information systems research’ with 140 citations in the Scopus database alone. The most prolific author, Miklos Vasarhelyi, has authored six articles and boasts the most scientific connections with other researchers in this field. The State University of New Jersey, USA, where Vasarhelyi works, stands as the most prolific institute with eight articles. Geerts (2011) receives 177 references from his two articles, earning him the title of the most cited author in the realm of design science in accounting research, while the University of Delaware, where he is affiliated, is also the most cited university. Among countries contributing to this field, the United States leads with the highest number of productive articles and references, totaling 33 articles and 555 references. The International Journal of Accounting Information Systems has published the most articles (20) and received the most references (464).DiscussionThe recently observed surge in publications indicates a growing interest among accounting researchers in this methodology. However, auditing literature hosts more DSR research (nearly half) than financial accounting and other branches. According to co-word analysis results, the design of auditing artifacts based on emerging technology is the predominant research trend, pursued by researchers to enhance audit quality and integrate emerging technologies into the auditing practice. These trends suggest an increasing emphasis on advanced audit and tech research in the future, with a focus on robotic process automation, analytics, and machine learning. In terms of actors at the levels of author, institution, and country, dominance lies with American contributors. Notably, journals that accept DSR papers are primarily technology-related, and mainstream accounting journals, such as The Accounting Review, have not yet embraced this research paradigm.ConclusionThis is the first attempt in accounting literature to conduct a bibliometric study on the research method known as DSR. Given the practical nature of accounting and the criticisms of low practical relevance of accounting research, scholars in the field have turned to DSR in recent years to undertake problem-solving inquiries through the design and evaluation of artifacts. Prospective researchers can benefit from examining seminal and highly cited papers and exploring current hot topics identified by this study to become acquainted with applying this research methodology and selecting trending topics for further inquiries.
Accounting report
Fatemeh Asnad; Hossein Fakhari
Abstract
Nowadays, the importance of water and the management of its resources are among the most controversial issues at the global level due to climate change. This issue is especially important in Iran, which suffers from continuous drought. Therefore, the current research aims to explain the determinants ...
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Nowadays, the importance of water and the management of its resources are among the most controversial issues at the global level due to climate change. This issue is especially important in Iran, which suffers from continuous drought. Therefore, the current research aims to explain the determinants affecting water reporting in the listed companies on the Tehran Stock Exchange. For this purpose, by using the data of 102 companies during the years 2012 to 2021 which were selected by elimination method, the determinants affecting the disclosure of water reporting were identified and analyzed using stepwise regression and multiple regression methods. The results of this research showed that the highest amount of disclosure related to water belonged to chemical and oil industry companies, Additionally, in the investigation of the determinants affecting water reporting, it was found that the determinants affecting water reporting, it was found that the determinants of firm age, board size, financial expertise of the audit committee, concentration of ownership, institutional ownership, return on assets, average annual rainfall, reputation, regulation, and sensitivity of the industry to water had an impact on corporate water reporting. These findings can be useful for planning and controlling water management, as well as for investors to know the drivers of corporate disclosure in forming their optimal portfolio. IntroductionNowadays, the importance of water and the management of its resources are among the most controversial issues at the global level due to climate change. This issue is especially important in Iran, which suffers from continuous drought. Therefore, the current research aims to explain the determinants affecting water reporting in the listed companies on the Tehran Stock Exchange.Research Question(s): What are the determinants influencing the disclosure of water reporting in Tehran Stock Exchange member companies? What is the impact of these determinants on the disclosure of water reporting? Literature ReviewAlthough the limitation of water resources and its serious role in sustainable life and economic activities are not hidden from anyone, with increasing concerns about water and its pollution, and the effects of climate change, how to effectively manage water and report it at the corporate level has become more important. This attention has been such that today the disclosure of water management information and its risks has become part of the strategy and sustainability efforts of companies. Water reporting at the company level is a tool for transferring information about water risks, the effects of risk, and the company's water resources strategy.Multiple theoretical frameworks can be used to justify the necessity of water reporting at the company level and its determinants. These theories are in the same direction and complement each other, such that they are competing theories because all of them are trying to explain corporate water reporting. These theories include legitimacy theory, stakeholders theory, social responsibility theory, and resource-based theory. MethodologyThe population studied in this research comprises the companies that are members of the Tehran Stock Exchange over a period of 10 years from 2012 to 2021, and ultimately, 102 companies (1020 company-years) were selected using the systematic elimination method. The method used in this research to explain the determinants affecting the disclosure of water reporting included five steps: In the first step, the study of literature related to water reporting and the determinants affecting it was conducted. In the second step, a comprehensive review of the literature was carried out by referring to Springer, Wiley, Science Direct, Google Scholar, and ResearchGate databases. The preliminary search identified a number of articles that focused on broad areas of disclosure. The process of studying the abstracts and introductions of the articles led to the exclusion of some out-of-scope studies. After filtering the results, only eight of these articles related to water disclosure were selected. In the third step, a questionnaire was prepared and distributed among experts to confirm and complete the components. This step was used as a complementary method, according to the experts, to confirm and complete the determinants extracted from the literature, taking into account the local conditions of Iran. The fourth step involved finalizing the determinants after reviewing the questionnaires; finally, ten responses were received from the questionnaires sent to the experts, and the questionnaires were tested with the independent t-test method. The results showed that all the determinants included in the questionnaire, except for gender diversity, were approved by the board of directors and the audit committee. In the fifth step, the stepwise regression method was used to examine the effective variables and select the effective stimuli on water reporting, and then the multiple regression method was used to measure the impact of each of the approved stimuli. ResultsIn the stepwise regression method, the dependent variable (water reporting disclosure) and independent variables (firm size, firm age, financial leverage, audit committee size, audit committee financial expertise, independent members of the audit committee, board size, ownership concentration, institutional ownership, government ownership, return on assets, corporate social responsibility, average annual rainfall, GDP growth, reputation, and sensitivity of the industry to water) were selected and, over 10 stages, various regressions were formed and finally, ten independent variables were confirmed. The adjusted coefficient of determination of this regression is equal to 0.322, which has the highest coefficient of determination compared to other models, and the value of the significance level of the model is equal to 0.000, which shows the significance of the model. Finally, in response to the research question of what are the drivers of water reporting in companies, the following variables can be mentioned: firm age, audit committee financial expertise, board size, ownership concentration, institutional ownership, return on assets, average annual precipitation, reputation, regulation, and industry sensitivity to water. Subsequently, to check the impact of each of the factors, the variables selected in the previous step were entered into the regression and analyzed with the multiple regression method. Finally, the regression equation was obtained as follows:WaterDisclosure= -3.327 – 0.620 LnAge + 0.764 BoardSize + 1.450 Concentration + 0.895 ROA + 0.119 Co-financial + 3.191 Reputation – 0.001 Rainy – 0.977 Regulation+ 1.450 Institutional + 0.162 Sensetive DiscussionBy reviewing the literature, it was found that several determinants were effective in water reporting in companies; some of these determinants were related to the structural characteristics of the company, some to the characteristics and ownership structure, and finally to the financial performance of the company. Also, determinants such as the existence of foreign regulation and supervision, the company's attention from major shareholders, and reputation, as well as the level of social responsibility of companies, can lead to more disclosure of water-related information. In this research, in addition to these determinants, some other determinants such as the country's economic growth, annual rainfall, and audit committee characteristics were investigated by interviewing experts. ConclusionAccording to the findings of the research, companies with higher profitability and reputation also have higher disclosure. In addition, the findings suggested that considering there is still no codified and general regulation for water management applicable to all companies in Iran, it is recommended, according to the theory of stakeholders, that legislators and the environmental organization establish specific and enforceable regulations for companies to adhere to and disclose information related to water in their reports. Furthermore, since there is currently a requirement for listed companies to prepare sustainable reporting, providing information on water and how to manage water and its risks can be combined with other information on social activities and governance. This integration of reports will enable better monitoring for policy-makers and foster collaboration among stakeholders for responsible water management and achieving sustainable goals at both the corporate and global levels.
Financial Accounting
Zahra Jafari; Rahim Bonabi Ghadim; Rasoul Abdi
Abstract
The purpose of this research is the evaluation of effective criteria for the desirability of financial stability integration based on the comparison of metaheuristic algorithms in banks listed on the Tehran Stock Exchange. Initially, through a systematic content screening process, the effective criteria ...
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The purpose of this research is the evaluation of effective criteria for the desirability of financial stability integration based on the comparison of metaheuristic algorithms in banks listed on the Tehran Stock Exchange. Initially, through a systematic content screening process, the effective criteria for the desirability of financial stability integration are used to evaluate banks listed on the Tehran Stock Exchange. Then, relying on two algorithms of Particle Swarm Optimization and Gray Wolf, the study reveals that both innovative algorithms used in this study have the necessary capability to determine the desirability of the financial stability of banks listed on the Tehran Stock Exchange.Metaheuristic Algorithms, Financial Stability Integration, The Desirability of Banks' Efficiency. IntroductionOne of the most important changes in the economic systems of societies is the increasing focus on the functions of financial stability in the banking systems of countries, which has been increasingly taken into account in macroeconomic policies. It is important to note that, due to reasons such as international sanctions, the banking system in developing countries faces many challenges, including disruptions in the banking system and financial exchanges as a result of the reduced foreign trade. This can lead to increased financial costs and risks, reduce public trust in the banking system, diminish international interactions with foreign banks, and disrupt the economic balance. The purpose of this research is the evaluation of effective criteria for the desirability of financial stability integration based on the comparison of metaheuristic algorithms in banks listed on the Tehran Stock Exchange. Literature ReviewFinancial stability in the banking system is defined as a low level of vulnerability to possible risks, which creates a level of balance and stability in banking systems through the ability to resist economic challenges. Elsa et al. (2018) also considered the financial stability of banks as a basis for economic growth functions in a definition and stated that a dynamic banking system needs to control the risks and costs of commercial transactions in a balanced economy to achieve stable financial stability. On the other hand, Verma and Chakarwarty (2023) suggested that if financial stability does not govern the banking systems of countries and they do not have the necessary efficiency, the optimal direction of resources to industries faces a serious challenge, and this issue can affect the country's economic growth in a short period. MethodologyThis study employs a combined and applied methodology. Initially, through a systematic content screening process, the effective criteria for the desirability of financial stability integration are used to evaluate banks listed on the Tehran Stock Exchange. Then, relying on the two algorithms of Particle Swarm Optimization and Gray Wolf and extracting data related to the criteria identified between 2017 and 2018, efforts are made to determine the optimal point of desirability of financial stability integration for banks listed on the Tehran Stock Exchange. In this process, based on the expansion of the mathematical equations of each metaheuristic algorithm and the command codes of the MATLAB software, necessary actions are taken to answer the research questions. ResultThe results showed that both innovative algorithms used in this study have the necessary capability to determine the desirability of the financial stability of banks listed on the Tehran Stock Exchange. However, based on the Wilcoxon Signed-Rank Test coefficients, the Gray Wolf algorithm is more accurate than the Particle Swarm Optimization algorithm for predicting the function of the identified criteria in determining the desirability of financial stability of banks listed on the Tehran Stock Exchange. The results after executing command processes in MATLAB software indicated that both algorithms have the necessary capability to determine the desirability of the financial stability of banks admitted to the Tehran Stock Exchange. However, based on the coefficients of the Wilcoxon test, the Gray Wolf algorithm has a higher accuracy than the Particle Swarm Optimization algorithm for predicting the performance of the identified criteria in determining the desirability of the financial stability of accepted banks. It is also found that the most effective criterion in strengthening the determination of the desirability of financial stability of banks is the liquidity circulation "ϑ3" in the Gray Wolf algorithm. DiscussionIt is also found that the most effective criterion in strengthening the determination of the desirability of banks' financial stability is the Turnover Ratio in the Gray Wolf algorithm. The coefficients obtained in the Gray Wolf algorithm indicate a more effective optimization of effective criteria in determining the financial desirability of the country's banking system. This issue provides an explanation for the interpretation that banks can benefit from this algorithm for financial planning and covering their weaknesses in preserving resources even in the risky conditions of today's economy. ConclusionThe results show that the banks whose total value of transactions in the capital market is higher than the average value of their total shares over a certain period have higher capacities for liquidity circulation. Furthermore, in providing banking services in current and investment matters in competitive projects, these banks have the upper hand compared to other banks. The existence of such added value of shares in the capital market can be considered as contributing to higher returns and lower risk for investing in these banks. Therefore, as the basics of determining the comparative evaluation between algorithms, i.e., the constant return to scale (CRS) and the variable return to scale (VRS) showed banks with higher liquidity circulation and relying on the Gray Wolf algorithm reach the optimal point faster. This finding illustrates the flexibility of financial resources in timely allocation to the market and industries, which can bring higher returns for their shareholders in the long run.
Financial Accounting
Mehdi Dasti; Mohammad Firouzian Nezhad; Ali Mahmoodi
Abstract
The purpose of this study is evaluating the reduction of the government's financial burden through the typology of drivers affecting generational accounting in the capital market by action research. In terms of methodology, this study has used Colaizzi's model (1978) to implement action research steps. ...
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The purpose of this study is evaluating the reduction of the government's financial burden through the typology of drivers affecting generational accounting in the capital market by action research. In terms of methodology, this study has used Colaizzi's model (1978) to implement action research steps. Therefore, based on this model, first, through interviews with experts and open coding, an effort was made to identify n Effective drivers on the implementation of generational accounting in capital market companies. Then, in order to validate the propositions, a critical evaluation was done to compare the propositions with similar researches, so that the propositions can enter the stage of forming a focus group to discuss and exchange opinions for the cognitive separation of each proposition in the form of a category. The results showed that a total of 22 propositions were identified from a total of 12 interviews and 217 open codes created. On the other hand, it was determined in the quantitative section, 22 criteria identified in 4 categories were the creators of the generational accounting typology framework of capital market companies. IntroductionOne of the most emerging concepts in the field of accounting knowledge, which in recent years has become a factor connecting the public sector to achieve sustainable development in the private sector, is generational accounting. Created to measure the relative financial burden on future generations, generational accounting is considered one of the financial tools of governments, both in the public and private sectors, that can help balance the circulation of cash in social contexts. Since industries operating in the capital market seek to provide financial resources to advance their business goals and facilitate economic growth and development, attention to the processes of allocating financial resources through the type of government support governance can reduce the financial burden on future generations. The purpose of this study is to evaluate the reduction of the government's financial burden through the typology of drivers affecting generational accounting in the capital market using action research. MethodologyIn terms of methodology, this study has used Colaizzi's model (1978) to implement action research steps. Therefore, based on this model, first, through interviews with experts and open coding, an effort was made to identify effective drivers influencing the implementation of generational accounting in capital market companies. Then, in order to validate the propositions, a critical evaluation was conducted to compare the propositions with similar research, so that the propositions could enter the stage of forming a focus group to discuss and exchange opinions for the cognitive separation of each proposition into a category. Then, through a Q evaluation checklist, each statement was scored between +4 and -4, and finally, a 4-level matrix was created to establish a foundation of effective drivers in the implementation of generational accounting, to reduce the government's financial burden on future generations. ResultAs it was determined during the research process, first through interviews and open coding, generational accounting propositions were identified. Then, to achieve validity, a matching between similar researches was performed to provide the possibility of entering the statements identified in the Q analysis model for the cognitive classification of this phenomenon in the context of capital market companies. Subsequently, by forming a focus group to determine the cognitive categories of the examined concept, during four sessions and by creating a Q evaluation checklist from +4 to -4 in 22 slots according to the identified propositions, the necessary actions were taken, and participants were asked to place each proposition in one of the 22 slots of the Q evaluation checklist. Then, through the Wiremax matrix, cognitive classes were determined regarding the separation of drivers affecting the implementation of generational accounting, and the results indicated the existence of four cognitive classes, which can be effective in reducing the financial burden of governments on future generations. The results showed that a total of 22 propositions were identified from a total of 12 interviews and 217 open codes were created. On the other hand, it was determined in the quantitative section that 22 criteria identified in four categories formed the creators of the generational accounting typology framework of capital market companies. ConclusionThe results showed that focusing on net transfer payments in the embargoed conditions of the country's industries can be considered a form of contingency governance that aims to balance the financial flow in the country's economic system. It reduces the high dependence of industries on developed economies in terms of providing resources or technological knowledge and helps balance the financial burden of the government in saving resources. Because the inefficiency of the economic infrastructure of the capital market system does not allow for the optimal allocation of resources to industries, the government sees no other way to prevent negative economic growth and the influence of other macro-economic factors, such as inflation, other than the allocation of resources through transfer payments. Although it is possible to infer the consequence of economic stickiness due to political maneuvers in the shadow of transfer payments, industries have no choice but to accept the role of the government in receiving transfer resources due to the lack of commercial exchange and the use of strategies with similar foreign companies. It is also important to mention that the lack of similar research with the analytical nature of this study makes it impossible to compare the results with other research.
Accounting and various aspects of finance
Akram Afsay
Abstract
The purpose of this study is to examine the relationship between financial expertise and the experience of the audit committee chairman with auditor selection, audit fees, and audit quality. To achieve the research goal, a sample equal to 99 companies listed on the Tehran Stock Exchange during the period ...
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The purpose of this study is to examine the relationship between financial expertise and the experience of the audit committee chairman with auditor selection, audit fees, and audit quality. To achieve the research goal, a sample equal to 99 companies listed on the Tehran Stock Exchange during the period from 2015 to 2023, equivalent to 792 company-years, was analyzed using multiple regression analysis based on combined data. The findings showed that the companies whose heads of the audit committee possess financial expertise are more likely to choose the Audit Organization or audit institutions with quality control ‘A’ as their independent auditors. Also, according to the findings, the financial expertise of audit committee heads leads to an increase in audit fees and audit quality. However, this study did not identify a significant relationship between the audit committee chairman's experience with auditor selection and audit fees, but a positive and significant relationship between the audit committee chairman's experience and audit quality was identified. The findings of this study contribute to the literature by documenting that financial expertise and experience of audit committee heads are important for improving the audit process and audit quality.1. IntroductionIn recent years, the significant impact of the audit committee on the effectiveness of the audit process has been confirmed by various researchers (Azizkhani et al., 2023). The chairman of the audit committee is considered the chief executive officer of the audit committee (Ernst & Young, 2013). It is necessary for the chairman of the audit committee, as a leader, to understand the culture of the organization, set clear expectations for the committee members, and consider both management and auditors in their decisions. The chairman of the audit committee, who is more responsible than other members of the committee, plays a vital role in controlling financial reporting and evaluating the effectiveness of the audit committee (Bromilo & Keeler, 2011). The chairman of the audit committee plays a key role in ensuring the quality of financial reports through cooperation with the members of the audit committee, setting the agenda of the committee, communicating with the board of directors, management, and independent auditors, and helping to select the members of the audit committee (Azizkhani et al., 2023). In Iran, the audit committee is one of the basic committees of a company. In 2013, the Securities and Exchange Organization required all listed companies to form an audit committee. This committee is responsible for supervising the work of internal and independent auditors, proposing independent auditors to the general meeting of shareholders for the purpose of appointing, determining the fees, and dismissing independent auditors, reviewing the frequency of audits, receiving audit reports, and ensuring that corrective actions are taken in a timely and correct manner. It is the responsibility of management to address weaknesses and shortcomings, non-compliance with policies, laws, and regulations, and resolve other problems identified by the auditors (Nazari et al., 2019). MethodologyThe present research is a descriptive, correlational study in terms of its applied purpose and the relationship between variables. The data and information used are historical and post-event. The statistical population of this research includes all the companies listed on the Tehran Stock Exchange. The statistical sample of the research comprises all the companies that were active in the stock market from the beginning of 2015 to the end of 2023 and meet the following conditions: 1. Their membership in the Tehran Stock Exchange must have continued throughout the research period. 2. The data needed for the research must have been available to them during the research period. 3. They must not belong to investment, financial mediation, holding, bank, or leasing companies. 4. The end of the financial year for these companies should not have changed during the research period and must coincide with the end of March. Finally, after applying the above conditions, 99 companies (equivalent to 792 company-years) were selected as the statistical sample. To collect the data, the database of Rahavard Novin and the reports published on Codal were used. Research hypotheses were tested based on combined data and using multivariate regression models. ResultIn this study, the effect of financial expertise and the experience of the head of the audit committee on auditor selection, audit fees, and audit quality was investigated. The findings indicate that the heads of the audit committee who possess accounting and financial expertise are more likely to choose a first-rate auditor (The Audit Organization or audit institutions with a quality rating of ‘A’) as an independent auditor. Additionally, audit committee heads with accounting and financial expertise tend to pay higher audit fees and enhance audit quality. These findings are consistent with the results of studies by Azizkhani et al. (2023), Lari Dasht Beyaz et al. (2017), and Ghafaran and Yasman (2018). Therefore, the accounting and financial expertise of the head of the audit committee, as an important and influential factor in the audit process, should receive attention from supervisory and legislative institutions. Due to its significance, it should become a legal requirement for companies listed on the Tehran Stock Exchange. ConclusionAlthough the accounting and financial expertise of the head of the audit committee was identified as an influencing factor in the selection of the auditor and the audit fee, the results of this study showed that the greater experience of the heads of the audit committee does not lead to the selection of a first-class independent auditor and does not significantly affect the audit fee. This finding is not compatible with the results of the studies by Elsayani et al. (2023) and Lari Dasht Beyaz et al. (2017). However, the findings indicate that the greater experience of the heads of the audit committee increases the quality of the audit, which is consistent with the findings of the study by Azizkhani et al (2023). These results indicate that the accounting and financial expertise of the head of the audit committee, as an internationally proven factor, demonstrates the expected performance in companies listed on the Tehran Stock Exchange. However, the experience of the head of the audit committee is not as effective as accounting and financial expertise. In this regard, it may be possible to attribute the weak role of audit committee heads in the selection of auditors and audit fees in our country as a reason for this lack of influence. It is expected that with the passage of time and future legal and regulatory reforms, audit committees will become more efficient and effective, and their heads will play a greater role in improving the audit process.
