stock exchange
Jamil Ebrahimi; Hosein Ameri; Esmaeil Amiri
Abstract
Trade credit serves as an accessible financing tool, particularly for firms facing financial constraints. This study aimed to examine the effect of financial constraints on the relationship between strategic deviation and trade credit. The research was applied in purpose and descriptive–correlational ...
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Trade credit serves as an accessible financing tool, particularly for firms facing financial constraints. This study aimed to examine the effect of financial constraints on the relationship between strategic deviation and trade credit. The research was applied in purpose and descriptive–correlational in design, and the data were analyzed using regression techniques. The statistical population included 124 firms listed on the Tehran Stock Exchange between 2016 and 2024, yielding 1,116 firm-year observations. The findings indicated a positive and significant relationship between strategic deviation and the use of trade credit, which was stronger among firms with severe financial constraints and under high bankruptcy risk, but weaker in firms with more stable financial conditions. Multiple sensitivity analyses, including alternative measures of the independent variable, exclusion of control variables, removal of year and industry effects, and testing the model with a moderating variable across groups with varying financial constraints, consistently confirmed the main results. Overall, the results showed that strategic deviation directly influenced corporate credit policies, with greater deviation increasing reliance on trade credit, and that financial constraints could moderate this relationship. IntroductionStrategic deviation within firms refers to a substantial divergence from the prevailing norms, conventions, and competitive practices of a given industry. Such deviation is not limited to superficial differences in tactics but reflects a deeper commitment to pursuing distinct strategic orientations and allocating organizational resources in unconventional ways. In many contexts, including emerging economies, these deviations are often driven by firms’ attempts to achieve differentiation, create innovative products and services, and ultimately secure new and more sustainable competitive advantages. By deliberately distancing themselves from industry routines, firms seek to overcome competitive inertia, foster innovation, and position themselves as leaders rather than followers. However, these benefits are rarely cost-neutral. Departures from industry norms typically require additional and sometimes substantial financial commitments to support experimentation, innovation, and higher levels of risk-taking. Therefore, the financing dimension of strategic deviation becomes critical, as firms must secure adequate resources to sustain their unconventional strategies. The purpose of this study is to examine whether and how strategic deviation influences firms’ reliance on trade credit as a substitute or a complementary financing source. Specifically, the research investigates whether firms that deviate more strongly from industry norms and resource allocation patterns exhibit higher usage of trade credit, and how this relationship is conditioned by the severity of financial constraints.Literature ReviewIn Iran’s economic and financial environment, the financing aspect of strategic deviation takes on particular significance. The country’s capital markets remain underdeveloped relative to those of advanced economies, and bank loans constitute the dominant and often sole source of external financing for most firms. Yet access to bank credit is limited and frequently subject to strict conditions imposed by lending institutions, the financial condition of the borrowing firm, and broader macroeconomic constraints. For many corporations, these restrictions create persistent financing challenges that constrain their ability to sustain growth and implement innovative strategies. Within this context, trade credit—defined as credit extended by suppliers in the form of deferred payments—emerges as an essential alternative financing mechanism.Trade credit is not only flexible and relational but also less dependent on collateral compared to formal bank loans, making it particularly valuable for firms facing financial constraints. Consequently, understanding how strategic deviation interacts with firms’ reliance on trade credit is an important question in both strategic management and corporate finance, particularly in emerging economies such as Iran.MethodologyThis study is applied in purpose and descriptive–correlational in method, drawing on an empirical sample of 124 non-financial firms listed on the Tehran Stock Exchange over the period 2016–2024, yielding 1,116 firm-year observations. To test the hypotheses, regression analysis techniques were employed, with trade credit measured through two widely accepted proxies: (i) the ratio of accounts payable to the cost of goods sold, and (ii) the ratio of accounts payable to total sales. Strategic deviation was operationalized through six indicators reflecting firms’ allocation of resources and financial structures: the ratio of net fixed assets to gross fixed assets, the inventory-to-sales ratio, the selling, general, and administrative expenses-to-sales ratio, the debt-to-equity ratio, the advertising expenditures-to-sales ratio, and the R&D expenditures-to-sales ratio. These variables capture multiple dimensions of deviation, from production intensity to marketing orientation and financial leverage. To ensure methodological robustness, principal component analysis (PCA) was applied to these six variables, producing a composite index of strategic deviation used in sensitivity analyses. This approach reduces multicollinearity and provides a more comprehensive representation of deviation patterns.Results and DiscussionThe empirical findings consistently demonstrate a positive and statistically significant relationship between strategic deviation and the use of trade credit. Firms that pursue greater deviation from industry conventions are more likely to depend on trade credit financing, suggesting that suppliers play a critical role in enabling unconventional strategies. Moreover, the relationship between deviation and trade credit is moderated by financial conditions: the association is stronger for firms experiencing severe financial constraints or operating under heightened bankruptcy risk, whereas the relationship weakens for firms in stronger financial positions or operating within the “safe zone.” These results indicate that trade credit serves as a crucial financing mechanism precisely when firms need it most—under conditions of resource scarcity and elevated risk. Robustness checks further reinforce these findings. The results remain consistent across multiple sensitivity analyses, including alternative measures of strategic deviation, the exclusion of control variables, the omission of year and industry fixed effects, and re-estimation across subsamples classified by financial constraints. Across all these tests, the central conclusion—that strategic deviation encourages greater reliance on trade credit—remains stable.ConclusionTaken together, the findings contribute several important insights. First, they highlight the pivotal role of strategic deviation in shaping short-term financing policies, particularly in environments where bank financing is limited. Second, the results underscore the substitutive role of trade credit, which allows strategically deviant firms to overcome financial barriers and continue pursuing innovation. Third, the study provides evidence from an emerging economy that broadens existing theoretical discussions in strategic management and corporate finance, which have largely been developed in advanced markets. From a managerial perspective, the findings suggest that managers of firms adopting non-traditional strategies should explicitly incorporate trade credit into their financing portfolios as a deliberate component of resource planning. Doing so not only sustains their strategic initiatives but also enhances resilience against financial shocks. From a policy-making perspective, the results highlight the need for supportive institutional frameworks that reduce structural barriers in supplier credit markets, enabling innovative firms to thrive. Ultimately, this study advances the literature by bridging strategic management and finance perspectives. It demonstrates that strategic deviation, while a driver of competitive differentiation, simultaneously creates financing challenges that can be mitigated through reliance on trade credit. By integrating insights on strategy, finance, and institutional context, the research offers a comprehensive view of how firms in emerging markets manage the tension between innovation and resource constraints.
Accounting tools
Hamideh Asnaashari; Mohammad Sadra Moradnia; Sina Asnaashari
Abstract
Given that the number of citations a research work gives to other studies is considered a measure of its scientific credibility, researchers might focus more on the quantity of citations rather than their thematic relevance to their own work. Therefore, this study aims to examine the thematic similarity ...
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Given that the number of citations a research work gives to other studies is considered a measure of its scientific credibility, researchers might focus more on the quantity of citations rather than their thematic relevance to their own work. Therefore, this study aims to examine the thematic similarity between the citations and the core topic of the citing research. To achieve this objective, Natural Language Processing (NLP) was employed as one of the most significant approaches for working with textual data in machine learning. After extracting citation data from the web pages of Science Ministry journals from 1393 until 1402(Iranian calendar) using web crawling, the thematic relevance of citations and the core theme of each study were calculated using the all-mpnet model. The results indicate that the thematic cohesion between citations and the core research topic in Iranian journals is at a proper level. Furthermore, the citations by Iranian researchers are primarily to sources published in first and second-quartile journals (Q1) and (Q2), indicating their credibility. Additionally, the most highly cited sources in Iranian accounting and auditing research were identified. The novel methodology and findings of this study can significantly contribute to evaluating citation practices. They can assist journals in more accurately assessing citations, helping them move beyond a sole focus on citation count and instead utilize the degree of citation relevance as an indicator for evaluating citation quality.Keywords: Bidirectional Encoder Representations from Transformers (BERT), Citation Analysis, Machine learning, Natural language processing, Text mining.IntroductionThe number of citations a paper receives has become one of the most visible proxies for scientific credibility in modern academia. Journals, funding agencies, promotion committees, and even national ranking systems routinely treat citation counts as evidence of impact (Dechow et al., 2020; van Raan et al., 2003; Woolgar, 1991). Yet this very pressure creates a perverse incentive: researchers may inflate reference lists with prestigious but topically distant sources simply to boost perceived legitimacy (Dai et al., 2021; Iqbal et al., 2021).In this study, we define citation quality through a new lens: thematic cohesion, which refers to the degree of semantic alignment between the core topic of a paper and the titles of every work it cites. Although erroneous and irrelevant citations have been documented even in top-tier international journals (Evans et al., 1990), no large-scale, automated assessment of thematic cohesion has ever been conducted in Iranian accounting and auditing literature.Using web scraping, Scopus quartile mapping, and state-of-the-art Sentence-BERT embeddings, we address three interrelated questions:To what extent do Iranian accounting researchers cite journals of established global prestige?How strong is the thematic cohesion between Iranian papers and the works they cite?By moving beyond raw counts and making relevance visible, measurable, and enforceable, this study offers editors a practical tool to reward substance over symbolism and provides Iranian accounting scholarship with a roadmap to even greater international influence. MethodologyThis quantitative study adopts an applied research design that combines content analysis with large-scale text mining. The population comprises all references appearing in articles published in Iran’s Ministry of Science-approved accounting and auditing journals between 2014 and 2023. Of the 20 recognized journals, 14 provided full-text HTML archives suitable for automated retrieval, forming the final sampling frame.Data were collected using custom Python web crawlers built with the Requests and BeautifulSoup libraries. The scripts systematically traversed journal archives, extracted article-level metadata, and downloaded full texts, yielding 3,436 published papers. After excluding 470 articles whose PDFs could not be parsed, 2,966 full texts entered the pipeline. From these, 132,543 raw references were harvested. Four exclusion filters were then applied, including Persian-language references, books, theses, conference papers, and working papers, legal documents and standards, and non-journal items without a DOI or Scopus entry. This rigorous cleaning retained 65,146 foreign journal citations from 2,938 articles.Each cited journal was matched to its ISSN in the Scopus Source List (2023 release). Quartiles were assigned dynamically by year and subject category, producing the final distribution: Q1 (77.5%), Q2 (15.2%), Q3 (5.4%), and Q4 + unranked (2.0%).Semantic similarity between every citing-title /and cited-title pair was computed using multilingual Sentence-BERT (sentence-transformers/paraphrase-multilingual-mpnet-base-v2), fine-tuned on more than 100 languages, including Persian and English. Cosine similarity scores were scaled to 0–100%. Inter-coder reliability was established on a random 500-pair subsample manually labelled by two accounting PhD candidates. Embedding stability was confirmed by repeating the analysis with three different seeds; the maximum variation in journal-level means was 0.12 percentage points.By combining web-scale data acquisition with state-of-the-art NLP, this methodology delivers the first objective, replicable measure of citation relevance ever applied to an entire national accounting literature. ResultsThe analysis of 65,146 international journal citations reveals a clear portrait of Iranian accounting scholarship: globally oriented, prestige-conscious, and already practising a respectable thematic discipline. Iranian papers’ citations suggest that 77 percent of the citations are made to Q1 journals. No ministry-approved journal falls below 67% Q1+Q2 combined. The leader, “Professional Auditing Research”, directs 83.1% of its citations to Q1 outlets; even the most locally oriented title, “Governmental Accounting”, still achieves 53.7% Q1.Across all 65,146 citation pairs, the mean thematic cohesion is 45.4%. The distribution is remarkably symmetrical and bell-shaped, peaking at 45–50%. Only 9% of citations reach the high-to-excellent zone above 55%, while 10% fall into the weak territory below 35%. In other words, Iranian accounting researchers rarely cite completely irrelevant work, but they also rarely achieve perfect topical harmony.Every single year stays within the 44.7–47.6% corridor. The absence of a strong upward or downward trend suggests that citation culture has matured but not yet entered a phase of deliberate relevance optimisation.Taken together, the results paint Iranian accounting scholarship as internationally ambitious and methodologically disciplined. The community already cites the right journals; the next frontier is citing the right ideas inside them. DiscussionThe fact that average thematic cohesion plateaus at 45.4%—solidly “good” yet never crossing the 50%, reveals a subtle but systematic gap. Ten percent of all citations drift into the weak zone (<35%). Another 81% hover in the moderate-to-good band, useful but rarely transformative. Only 9% achieve the high-to-excellent alignment that signals a genuine intellectual dialogue. This gap is not unique to Iran. Global studies repeatedly warn that citation inflation, the Matthew Effect, and strategic referencing are widespread (Biglu, 2008; Bornmann & Daniel, 2008; Dai et al., 2021). What makes the Iranian case instructive is the stability of the 45% ceiling across ten years and fourteen journals.The benefit of thematic cohesion is that it is cheap, instantaneous, and impossible to game. A single Sentence-BERT inference on a standard laptop takes 0.03 seconds per citation pair. An entire manuscript can be scored before the reviewer finishes the first page. Journals that adopt a modest gate would immediately filter out decorative references while preserving author freedom. Early adopters elsewhere have reported reference list shrinkage of 12–18% with no loss of scientific depth (Aljuaid et al., 2021; Anglin et al., 2021). ConclusionIranian accounting and auditing scholarship has reached a pivotal moment. For a decade, the community has looked outward with confidence: 77.5% of all citations now flow to Q1 journals. Yet global engagement must now evolve into a global conversation. The 45.4% average thematic cohesion achieved across 65,146 citations tells editors that most references already serve the argument, but one in ten does not, and only one in eleven truly transforms it.When Iranian journals lead the shift toward the new article evaluation measure provided in this paper, first, domestic papers will become sharper, more readable, and more persuasive. Second, international reviewers will notice the difference and reward it with faster acceptances and higher citations. The future of Iranian accounting research is therefore not about citing more; it is about citing better.
Accounting report
Morteza Adlzadeh
Abstract
Disclosing key audit matters since 2022 has become necessary to enhance the informational value of the auditor's report, but research evidence regarding its consequences is limited. Among the implications, its impact on the auditor's perception of accountability and decision-making regarding adjustments ...
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Disclosing key audit matters since 2022 has become necessary to enhance the informational value of the auditor's report, but research evidence regarding its consequences is limited. Among the implications, its impact on the auditor's perception of accountability and decision-making regarding adjustments to financial statements is notable. To this end, a two-way between-groups experiment with a (2×2) design was conducted. Participants in this study included 120 partners, managers, and senior auditors employed in accounting firms that are members of the Institute of Certified Public Accountants. A scenario of a fictional company was provided to participants, and the independent variables of the research were manipulated at four levels: 1) Disclosure (or nondisclosure) of key audit matters and 2) Normal (or extended) management explanatory note. The findings suggest that both the disclosure of key audit matters and the extended management note reduce the auditor's sense of accountability, and this decreasing effect is maximized at the interaction of key audit matters and the extended note. This indicates the unintended consequences of key audit matters disclosure on the auditor's accountability perception. Furthermore, the results showed that the disclosure of key audit matters and extended notes led to increased expected adjustments by auditors to identify impairment losses, suggesting a more conservative behavior from auditors. The research outcomes regarding the implications of expanded disclosure on the auditor's perception of accountability, decision-making, and judgment on financial statement adjustments can be valuable for regulatory and supervisory bodies as well as auditors. IntroductionCorporate reporting plays an essential role in the effective functioning of the global economy and makes an important contribution to shaping our understanding of the current and future drivers of value creation in business and the financial sector. Corporate reporting is constantly evolving in order to meet the demands of a diverse and expanding range of users, and efforts have been made to adapt reporting procedures to continuous changes in the regulatory and business environment. Policymakers and various stakeholders in corporate reporting need to develop new approaches for forecasting and policymaking with regard to future developments. In this situation, there is a growing demand to increase transparency and improve reporting mechanisms, and therefore, professional and academic authorities, standard-setting authorities, regulatory bodies, and other interested groups in corporate reporting have started to conduct studies, provide solutions, and requirements in order to improve the corporate reporting system. In this regard, legislative institutions and standard-setting organizations have always tried to provide standards and recommendations in an evolutionary process to improve reporting and meet the information needs of investors in allocating their resources. Therefore, an appropriate policy for changes in the corporate reporting system is very important. Corporate reporting requires the adoption of appropriate decisions by corporate reporting policymakers.Research Questions:The main research questions are as follows:What are the main scenarios of the possible future of corporate reporting in Iran's economic environment?According to different scenarios, what should be the appropriate policy for the stakeholders of corporate reporting? MethodologyThis study is applied research, and a mixed methodology has been used to achieve the objectives of the research. In order to identify the driving forces affecting the future of corporate reporting through semi-structured interviews, according to Kvale and Brinkman (2009), and to analyze the data from the interviews, the thematic analysis method was used. In order to evaluate the qualitative part, appropriate methods for this type of research have been used according to the approach of Creswell (2008). In the second step, fuzzy Delphi analysis was used in order to create a consensus regarding the identified drivers. Next, to measure the level of importance and uncertainty, a questionnaire including the list of consensus drivers affecting the future of corporate reporting was provided to the participating experts in the previous stages of the research. In order to evaluate the policy options, first of all, with the expert panel method, policy issues in corporate reporting were identified, and action options were developed for each issue. Then, the evaluation of the policy options based on the opinion of the experts was done with the questionnaire tool. The results of the questionnaire analysis were analyzed using MATLAB software and the development of a fuzzy inference system. ResultsIn the exploratory interview phase with experts, a total of 37 effective drivers affecting corporate reporting were identified, and after two stages of fuzzy Delphi implementation, a total of 18 drivers were approved and agreed upon by the experts. The drivers agreed upon by the experts were considered as the basis for developing the scenario based on the Schwartz model (1991). The three drivers of "entering the global economic arena with the removal of sanctions", "privatization of ownership," and "changing the collateral-based financing system to credit-based" are the drivers that together have a high level of importance and uncertainty and constitute the main basis for developing distinct corporate reporting scenarios. Considering that three drivers are the basis for designing the scenarios and each one has two possible states, a total of eight scenarios were designed. To evaluate policy options, five main corporate reporting challenges were identified, and ten action options were developed. Finally, according to the analysis of the evaluation results of the policy options based on the robust planning criteria, the best policy option was determined. ConclusionThe evaluation of different scenarios shows that scenario number 1, with the main indicators of increasing the link with the global economy, privatization of ownership, and credit-oriented financing, is a favorable scenario for corporate reporting, where there is a more suitable platform, demand, and environment for the development and progress of corporate reporting. However, it is important to note that in this scenario, the level of expectations from corporate reporting is also higher, and if these needs are not adequately met, the stakeholders' reliance on other information mechanisms will increase. According to the analysis of the results of the evaluation of policy options based on robust planning criteria, the policy option that includes: increasing the target audience group, giving more priority to public interests, more recognition of intangible assets, moving towards the adoption of international standards, and developing non-financial reporting types with new requirements was identified as the best policy option for corporate reporting, as it demonstrates appropriate and acceptable performance in different scenarios.
stock exchange
Reza Iranbakhsh; Hasan Valiyan; Mohammadreza Abdoli; Maryam Shahri
Abstract
The present study seeks to present a paradigmatic framework from causes to consequences to develop the phenomenon of breaking the governance entrenchments of capital market companies. The methodological nature of this study is mixed, according to which, in implementing the analytical objectives of the ...
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The present study seeks to present a paradigmatic framework from causes to consequences to develop the phenomenon of breaking the governance entrenchments of capital market companies. The methodological nature of this study is mixed, according to which, in implementing the analytical objectives of the study, an attempt was first made through the Strauss and Corbin (1998) approach in grounded theory to identify the dimensions that can be seen in the five dimensions of the paradigmatic model through interviews and three-stage coding. The research findings in the qualitative section were derived from 12 interviews, indicated the identification of 60 propositional themes during open coding, 12 components during axial coding, and 6 structural categories during selective coding, which ultimately resulted in the presentation of the research paradigmatic model. Moreover, in the quantitative part of the present study, the research findings confirmed the generalizability of the dimensions derived from the qualitative part to the quantitative part through fitting the structural suitability of the PLS wrap in the partial least squares process.IntroductionCorporate governance in financial market structures is known as a mechanism for protecting shareholder rights, and its most important function is often to ensure effective and transparent company performance by determining long-term strategies and macro-goals, which can greatly reduce the potential risks of violating stakeholder rights by monitoring the performance of executive managers and complying with laws and regulations. Therefore, according to the definition of the Organization for Economic Cooperation and Development (OECD), the governance system includes a set of procedures and processes according to which companies should be directed and controlled in such a way that, by distributing specific limits of authority and responsibilities to appointed managers, the possibility of managerial unaccountability is reduced and the level of competitive legitimacy of companies is increasingly strengthened. Therefore, the most important fundamental principles of corporate governance in financial markets can be sought in ensuring effective observance of shareholder rights, preventing ownership opportunism, making decisions regarding the ratio of share distribution between general shareholders and institutional shareholders, combining the structure of the board of directors from the perspective of maintaining independence and effectiveness of monitoring fair decisions, and improving the quality of information disclosure for greater transparency, thereby reducing agency costs in these markets. MethodologyThe present study should be placed, first of all, from the perspective of its purpose, among exploratory research, which, due to the novel nature of the "staggered board structuring" in the context of theoretical approaches to the capital market, does not have sufficient cognitive coherence. Therefore, this study, through the tool of interviewing experts, seeks to understand the causal aspects of the consequences of the development of the aforementioned pivotal phenomenon with the aim of breaking the corporate governance entrenchment in the field of market companies, which, due to the greater level of functional transparency in institutional supervision, makes it possible to achieve higher competitive advantages in a more sustainable manner.In terms of the objective approach in methodology, this study should be considered as developmental research. This is because, while there are few studies focused on this phenomenon, there are no reliable foundations for a correct understanding of the structuring of the staggered board of directors, at least at the present time, and this study seeks to provide a paradigmatic model for a more coherent development of this concept in the context of capital market companies.Finally, from the perspective of data type, the present study should be considered mixed, which, through inductive-deductive philosophical foundations, seeks to expand the areas of structuring the board of directors of Pelkan in the form of an initial abstract model to break the possibilities based on the entrenchments of the corporate governance system in the context of the capital market, so that in the quantitative part, it can be possible to evaluate the dimensions arising from the paradigmatic model based on generalization to the context of the study.Accordingly, it is possible to implement analytical procedures to achieve the objectives of this study through data analysis based on the Strauss and Corbin (1998) approach, so that aspects related to this phenomenon can be identified and categorized into paradigms through interviews with experts in the field, through three stages of open, axial, and selective coding. Thus, the categorizations resulting from the coding of the interviews can ultimately guide the study to a theoretical framework, so that in the form of a paradigmatic model based on the five dimensions of [causal conditions], [intervening conditions], [contextual conditions], [strategies], and [consequences], it is possible to measure the identified dimensions within the framework of a structural fit of the utility model, according to an analogical approach. FindingsIn this study, an attempt has been made to identify five dimensions of the paradigmatic model: "causal conditions", "interventing conditions", "contextual conditions", "strategic conditions", and "consequences" through a mixed methodological process, first by analyzing grounded theory and the Strauss and Corbin (1998) approach, and then by interviewing experts, through three stages of open, axial, and selective coding. By determining these criteria in the grounded theory process, the research, after measuring the content validity index (CVI) and the test-retest reliability method, proceeded to present the paradigmatic model as a basis for recognizing the necessity of implementing a staggered board of directors in breaking the governance entrenchment at the capital market level. Then, in order for this framework to serve as a strategic roadmap in the Iranian capital market system to help policymakers gain a more significant understanding of the central phenomenon of the study in the corporate governance system, a paradigmatic model was developed through structural equation analysis. The findings, while confirming the number of central components according to the paradigmatic model, provided the possibility of generalizing these criteria to the study context for conducting two exploratory and confirmatory factor analyses. Through these two criteria, the structural fit coefficients were examined, and it was determined that the dimensions identified in the paradigmatic model indicate a suitable ability to be extended to the Iranian capital market. ConclusionThe present study seeks to present a paradigmatic framework from causes to consequences to develop the phenomenon of breaking the governance entrenchments of capital market companies. The findings show that the phenomenon of staggered board structuring should be described as an obstacle to the governance entrenchments of capital market companies, which have caused corruption and financial distortions in the contemporary capital market due to possible self-interest in the appointment of directors. Therefore, periodic changes in board members based on a review of the comprehensive corporate governance system in the capital market are among the necessities that today contribute to more structured financial transparency in developing countries by adopting such mechanisms, thereby creating a higher level of accountability and, as a result, higher legitimacy of financial markets. These rules help markets become more orderly in protecting the rights of shareholders, investors, and regulators, while reducing the scope for opportunistic behavior by companies that pursue their own interests through strategic appointments in the capital market.
stock exchange
Seyed Mohammad Amin Fayazi; Mehdi Nikravesh; Majid FarhaniZadeh
Abstract
This study, considering the growing role of managers’ behavioral characteristics in financial decisions and the importance of ownership structure in shaping the consequences of these characteristics, examined the effect of CEO overconfidence on corporate resilience and the moderating role of ownership ...
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This study, considering the growing role of managers’ behavioral characteristics in financial decisions and the importance of ownership structure in shaping the consequences of these characteristics, examined the effect of CEO overconfidence on corporate resilience and the moderating role of ownership concentration. The main objective of the study was to test the effect of CEO overconfidence on corporate resilience and to examine the moderating role of ownership concentration in this relationship. The research was applied in nature and, in terms of method, was descriptive–causal based on archival data. The statistical population included companies listed on the Tehran Stock Exchange and Iran Fara Bourse during the years 2015 to 2024, from which, after applying screening criteria, 206 companies, equivalent to 2,060 firm-year observations, were selected as the final sample. Managerial overconfidence was measured using three proxies based on investment patterns and was converted into a composite variable through factor analysis. Ownership concentration was measured based on the percentage of shares held by major shareholders, and resilience was measured using stock price crash severity. The hypotheses were tested using panel data regression models with controls for year and industry effects. The findings showed that managerial overconfidence alone had no significant effect on corporate resilience; however, the interaction effect of ownership concentration and CEO overconfidence was significant. The results indicated that the impact of CEO overconfidence on corporate resilience depended on the level of ownership concentration, and this ownership mechanism could shape the way managerial behavioral consequences manifest.IntroductionThis study examines the effect of CEO overconfidence on corporate resilience with emphasis on the moderating role of ownership concentration in firms listed on the Tehran Stock Exchange and Iran Fara Bourse. The motivation for conducting this research stems from the growing attention paid to managerial behavioral characteristics in corporate finance and strategic decision-making. In recent years, scholars in behavioral finance have increasingly emphasized that managerial traits and psychological biases can influence corporate decisions and ultimately affect firm outcomes. Among these behavioral characteristics, managerial overconfidence has attracted considerable attention because it may influence managers’ perceptions of risk, investment opportunities, and the expected outcomes of strategic decisions. At the same time, corporate governance mechanisms—particularly ownership structure—play an important role in shaping how managerial characteristics translate into organizational outcomes. Ownership concentration, which reflects the extent to which shares are held by large shareholders, can influence monitoring intensity, managerial discretion, and the effectiveness of governance mechanisms. Accordingly, examining the effect of CEO overconfidence on corporate resilience without considering the governance context may provide an incomplete understanding of the phenomenon. Therefore, the present study aims to investigate the effect of CEO overconfidence on corporate resilience and to determine whether ownership concentration moderates this effect in firms listed on the Tehran Stock Exchange and Iran Fara Bourse. Literature ReviewPrior studies indicate that CEO overconfidence can significantly influence corporate investment, financing, and strategic decision-making. Overconfident managers tend to overestimate their ability to generate favorable outcomes and may consequently undertake more aggressive investment strategies or engage in riskier financial decisions. While such behavior may sometimes lead to positive outcomes, it may also expose firms to higher levels of uncertainty and vulnerability. Therefore, managerial overconfidence can potentially affect different dimensions of firm performance and stability, including corporate resilience. Corporate resilience refers to a firm’s capacity to withstand adverse shocks and maintain stability in the face of uncertainty and market fluctuations. From this perspective, managerial decisions influenced by behavioral biases may affect the firm’s vulnerability to negative events and its ability to absorb and recover from such shocks. However, the consequences of managerial overconfidence are not necessarily uniform across all firms. The impact of this behavioral trait may depend on the governance environment in which managerial decisions are made. Ownership concentration, as an important component of corporate governance, can influence the degree of monitoring imposed on managers and the extent of managerial discretion. In firms with higher ownership concentration, major shareholders may exert stronger monitoring and oversight over managerial decisions. Such monitoring may influence how managerial overconfidence translates into corporate outcomes. Consequently, ownership concentration may play a moderating role in shaping the effect of CEO overconfidence on corporate resilience. Based on these theoretical arguments and prior empirical findings, the following hypotheses are proposed:Hypothesis 1: CEO overconfidence has a significant effect on corporate resilience.Hypothesis 2: Ownership concentration moderates the relationship between CEO overconfidence and corporate resilience. MethodologyThe study is applied in nature and adopts a descriptive–causal design based on archival data. The statistical population consists of all firms listed on the Tehran Stock Exchange and Iran Fara Bourse during the period 2015–2024. After applying screening criteria, including data availability, a consistent fiscal year-end, and the exclusion of financial institutions, the final sample includes 206 firms, resulting in 2,060 firm-year observations.CEO overconfidence is measured using three investment-based proxies (OC-V, OC-AS, and OC-CAPEX). To avoid multiple separate estimations and to capture the common variation among these measures, factor analysis is used to construct a composite overconfidence variable. Ownership concentration is measured as the percentage of shares held by major shareholders. Corporate resilience is measured using stock price crash severity. The hypotheses are tested using panel data regression models with year and industry fixed effects. To examine the robustness of the findings, the models are re-estimated using each individual overconfidence proxy separately. ResultsThe empirical findings indicate that CEO overconfidence does not have a statistically significant direct effect on corporate resilience. This result suggests that managerial overconfidence alone is not sufficient to explain variations in corporate resilience among the sampled firms. The absence of a significant direct effect was observed both in the main model that uses the composite overconfidence variable and in the robustness tests that rely on individual overconfidence proxies. However, the results also reveal that the interaction term between ownership concentration and CEO overconfidence is statistically positive and significant. This finding indicates that the effect of CEO overconfidence on corporate resilience depends on the level of ownership concentration within the firm. In other words, ownership concentration alters the way in which managerial overconfidence influences corporate resilience. Furthermore, the moderating role of ownership concentration remains generally stable across alternative model specifications, which provides additional support for the robustness of the findings. These results suggest that corporate governance mechanisms—particularly ownership concentration—can shape the consequences of managerial behavioral characteristics. ConclusionThe findings of this study indicate that CEO overconfidence alone does not significantly explain variations in corporate resilience among firms listed on the Tehran Stock Exchange and Iran Fara Bourse. However, ownership concentration plays a positive and significant moderating role in the effect of CEO overconfidence on corporate resilience. This implies that the governance structure of firms can influence how managerial behavioral characteristics are reflected in corporate outcomes. Overall, the results highlight the importance of considering ownership structure when examining the consequences of managerial behavioral traits. The findings also suggest that the impact of CEO overconfidence on corporate resilience should be interpreted within the broader context of corporate governance mechanisms. These insights contribute to the literature on behavioral corporate finance and corporate governance by emphasizing the role of ownership concentration in shaping the effect of managerial overconfidence on firm resilience in the Iranian capital market
Accounting and various aspects of finance
Abouzar Parsaiee; Saeed Moradpour; Mohammad Hossein Ranjbar; Morteza Bavaghar
Abstract
This paper aims to present a model of individual and macro-level factors affecting tax accounting quality. In terms of research directions, this paper is a combination of applied and developmental studies. In this research, 19 experts were used as the study sample. In order to conduct this research, ...
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This paper aims to present a model of individual and macro-level factors affecting tax accounting quality. In terms of research directions, this paper is a combination of applied and developmental studies. In this research, 19 experts were used as the study sample. In order to conduct this research, first, 59 indicators were identified in the form of two components, individual and macro-level factors, using the content analysis approach. In the second part, with a survey of experts and the fuzzy screening method, important and effective indicators were determined. At this stage, 38 indicators were selected. The results of the analyses carried out in the structural-interpretive modeling method indicated that the indicators of individual and macro-level factors were placed at five and one levels, respectively. Also, the results obtained from the fuzzy network analysis method indicate that, from the point of view of experts, the most important indicators are the "financial manager gender" and the "corruption level" index in the case of macro-level factors.IntroductionIn recent years, increased regulatory focus on financial reporting related to income tax has drawn significant attention to the quality of tax accounting information disclosed in companies’ annual reports. This issue has become particularly pronounced in Iran due to economic sanctions, which have compelled the country to reduce its budget dependence on oil revenues and enhance tax revenue collection through improved transparency and tax justice. Consequently, the quality of tax accounting has emerged as a critical and timely concern in Iran, with various groups and organizations striving to find effective solutions to improve the quality and transparency of tax accounting information. Literature ReviewA comprehensive review of domestic and international literature on taxation and the quality of tax accounting identified a total of 59 potential individual-level and macro-level factors influencing the quality of tax accounting in Iranian companies. These factors were extracted through content analysis of prior studies, highlighting a wide range of indicators that could potentially affect tax accounting quality. However, the applicability and significance of these indicators in the specific context of Iran remain subject to expert evaluation. MethodologyThis study aimed to model and rank the individual and macro-level factors affecting tax accounting quality in Iran. Initially, 59 indicators were identified from the literature review and content analysis. Subsequently, a fuzzy screening technique was employed, along with expert opinions, to refine and select the most relevant 38 indicators. The interrelationships and hierarchical levels of these indicators were then explored using the Interpretive Structural Modeling (ISM) technique. Network analysis was also utilized to determine the relative importance and influence of each indicator. ResultsThe findings revealed that all 19 macro-level indicators operate at the same hierarchical level, directly influencing each other. In contrast, individual-level indicators were classified into five hierarchical levels:Level 1: Tax accounting understanding, loss aversion threshold motivation, earnings decline avoidance motivation, and tax specialists.Level 2: Tax information asymmetry, earnings management forecasting, financial manager competence, and managerial conservatism.Level 3: Management judgment, managerial optimism, managerial analytical power, financial confidentiality, and managerial reputation.Level 4: Behavioral cultural intelligence, and ethical sensitivity.Level 5: Gender of the financial manager, gender of the CEO, financial manager experience, and managerial capability.Indicators at Level 5, considered foundational, exert the greatest influence on indicators in higher levels, while those at Level 1 are most influenced by other factors. The study identified “gender of the financial manager” as the most influential individual factor for enhancing tax accounting quality, consistent with previous research emphasizing the positive role of female managers in financial reporting transparency and earnings quality. Among macro-level indicators, the societal corruption level was identified as the most critical factor affecting tax accounting quality, followed by tax culture and modern technologies such as big data analytics. DiscussionThe hierarchical model indicates that managing foundational individual factors such as managerial gender, experience, and capability can significantly enhance tax accounting quality. The strong influence of macro-level factors, particularly corruption, suggests that broader socio-economic reforms are essential to improve tax accounting standards. Furthermore, the differing importance assigned by experts to various factors reflects the contextual specificity of Iran’s economic and regulatory environment. The findings align with prior international studies but also highlight unique local considerations that shape tax accounting practices. ConclusionThis study offers a structured framework to understand and prioritize the individual and macro-level determinants of tax accounting quality in Iran. Policymakers and practitioners are advised to focus on managing both micro-level managerial attributes and macro-level environmental factors to promote transparency and accuracy in tax accounting. Future research could extend this model by examining the interplay between tax accounting quality and variables such as board characteristics, ownership structure, financial information quality, and institutional investors. Limitations include the reliance on expert opinion and questionnaire methods, which should be considered when applying the findings.
Audit Quality
Sasan Habibi; Rezvan Hejazi; nezam addhn rahimian; morteza asadi; liela zamani
Abstract
The reporting of Key Audit Matters (KAMs) represents a fundamental shift in modern auditing standards, aimed at enhancing the transparency of financial reports and improving communication between auditors and stakeholders. Despite the mandatory adoption of International Standard on Auditing (ISA) 701 ...
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The reporting of Key Audit Matters (KAMs) represents a fundamental shift in modern auditing standards, aimed at enhancing the transparency of financial reports and improving communication between auditors and stakeholders. Despite the mandatory adoption of International Standard on Auditing (ISA) 701 in Iran, there is a noticeable lack of a localized and coherent framework that captures the economic, cultural, and professional complexities affecting the KAM reporting process. This gap has led to operational and judgmental challenges, undermining the effective implementation of the standard. Therefore, this study aims to develop and present a comprehensive model for KAM reporting from the perspective of auditors in Iran. IntroductionDespite the many benefits of reporting on key audit matters, the implementation of this standard in practice faces several challenges. These challenges at the global level include the complexity of identifying and selecting key audit matters, the balance between transparency and confidentiality, professional pressures and stakeholder expectations, implementation costs, and cultural-supervisory differences. However, the global literature has been produced mainly in the context of stable economies with integrated supervisory systems, and its direct generalizability to unconventional economic-political environments (such as Iran, which is affected by international sanctions, chronic inflation, and currency fluctuations) is theoretically uncertain and, in practice, requires testing and adjustment.In Iran, given the adoption of the ISA701 standard by the Auditing Organization since 1401, these challenges have taken on a different and more complex form in the context of specific economic conditions (such as chronic inflation, currency fluctuations, and sanctions) and the characteristics of the auditing profession (such as differences in the level of preparedness of audit firms, conservative culture, and regulatory restrictions). Therefore, relying solely on foreign literature and models without considering these local factors can lead to a formal and ineffective implementation of the standard. MethodologyThis study employed a mixed-method sequential exploratory design. In the qualitative phase, a grounded theory methodology was used. The qualitative population consisted of technical managers, senior executives, board members of the Audit Organization, partners and managers of Tehran Stock Exchange-approved audit firms, and audit committee members of listed companies, selected through theoretical sampling. Semi-structured interviews were conducted until theoretical saturation was achieved. Data analysis was performed through open, axial, and selective coding, leading to the development of a conceptual paradigm model. Subsequently, this model was tested in the quantitative phase using 130 valid questionnaires. In the quantitative phase, a researcher-made questionnaire was developed directly from the qualitative findings, including Likert-scale items, open-ended questions, and scenario-based questions. The questionnaire was distributed among senior auditors and audit managers from the Audit Organization and audit firms. FindingsStructural equation modeling (SEM) was employed to test the research hypotheses. The qualitative analysis identified five main categories within a paradigm model, including causal conditions, contextual conditions, intervening conditions, strategies, and consequences. The core phenomenon was identified as "Key Audit Matters Reporting." The quantitative results confirmed that legal requirements and professional judgment (causal conditions) have a positive and significant effect on the KAM reporting process. Furthermore, strategies such as interaction with the audit committee and enhancing transparency lead to two distinct types of consequences: internal consequences (including increased audit fees, extended audit time, and improved documentation quality) and external consequences (including reduced information asymmetry, strengthened investor confidence, and enhanced professional legitimacy). The distinction between these two categories shows that despite the cost-intensive nature of this process for audit firms (internal consequences), its achievements at the capital market level (external consequences) justify accepting this professional responsibility. The structural model demonstrated good fit, with strategies having the strongest impact on consequences. All research hypotheses were confirmed at a high confidence level. The explained variance for the core phenomenon and for the consequences indicated a strong model. This study provides a comprehensive, locally developed model for KAM reporting in Iran. The findings confirm that KAM reporting in Iran extends beyond a technical requirement to become a tool for risk management and the reconstruction of auditors' social capital in a volatile economic environment. The model highlights that external consequences (e.g., reduced information asymmetry, enhanced investor confidence, improved professional legitimacy) significantly outweigh the internal costs (e.g., increased fees, longer audit times), thereby justifying the adoption of this professional responsibility. The results of structural equation modeling confirmed the positive and direct significance of causal variables on KAM reporting and validated the mediating and consequential roles of the extracted constructs. The study emphasizes that effective implementation of ISA 701 in Iran requires localized guidelines, continuous professional training, improved auditor-manager interaction, and the establishment of an industrial database of reported KAMs. Innovation in researchThe main innovation of this research is the separation of consequences into two levels: internal and external. Regarding internal consequences (costs and risk), the findings showed that reporting major issues increases fees and processing time.
