Empirical Studies in Financial Accounting

Abstract In this research, the Market efficiency related to going concern entity and its Probability reflect on the price/earnings ratio (P/E) was tested that whether, when going concern entity evaluated above later it's PIE become near to industry's P/E and vice versa? In this research, one of the bankruptcy production models wdll- known as zargin Model is used for sorting and ranging the entities on the base of going concern, which its output data is limited on zero and one, indicates the probability of the bankruptcy and going concern of the entity. In the use of this model, since the model was prepared on the entities' activity environment and its structure in the other countries and it wasn't consistent for Iranian corporation's activity environment, so after selection of the sample consisted of 40 corporations in the SEC, its coefficients are corrected and constituted with Iranian corporation's qualitative and in the along of doing research at first , the efficiency of the model was tested with the  sample consisted  of  14 normal and   bankrupt   and   going   concern   probabilities   for  the sample corporations of the car industry was computed. Also as regards the evaluating high and low of the P/E ratio was problem, the amount of farness and nearness of the entity's P/E to industry’s P/E are adopted and computed as favorable parameter. Then the existence of meaningful correlation relationship between computed going concern relatively ability and amount of contradiction of entity's P/E than industry's P/E was tested. The results of study showed  that  there  isn't  any   meaningful   relationship between these two parameters in the  level  of  supportable error of 5 percent   and  we cannot use the  evaluating of differences between entity's PIE to find out  the  amount their going concern ability in the future.

Abstract The existence of the reliable financial information is necessary for the permanence Eternity of the today world financial (economic) decision making needs to confident and reliable information. The role of the ·auditors is to attest (verify) the financial statements that results in being confident and sure about the desirability of the presentation and reliability of the financial statements. The main goals of this research is study and make conclusion about the auditing functions in attesting to financial statements in Iran and its reflecting on the stock-holders behavior has been Studied. In this paper the effect of the different opinions and qualifications in auditing reports on the stock prices has been assessed. Testing research hypothesis shows that there is a meaningful relation between auditing reports and stock prices.

Abstract After initial Pricing of stocks at Tehran stock exchange, security prices will fluctuate according to the market prices. The question is which theoretical model, the market price of securities, will follow? The aim of this study is to identify among the best theoretical models, a model, which can best define the market price. In this research, three valuation models which are best recommended in financial management literature are chosen, and the stocks which are traded at Tehran stock exchange are valued by them. Then the actual security prices, revealed by market are compared with those calculated values. The results of this study shows that if the required rate of return is calculated by CAPM, the Walter model compared to Gordon growth model and present value model of future cash flows, calculate security values closer to the market prices of the securities. The results also indicate when the fixed required rate of return of 40% is used; Gordon growth model will give values closer to the market prices of the securities.

Abstract The aim of this research is to find any relationship between productivity and profitability indexes; the fact that whether productivity level movement affects the profit movement or not? And if there is any relationship between them, how is it? To Study the subject , among population of private and public companies of foodstuffs and drinkables groups  - which  had  been  accepted  in  Tehran  stock  exchange  -   a sample of 27 members was selected by  random  method; they were studied from 1375 (the beginning of  financial  year)  to  1374 (the  end  of  financial  period). In this research, profitability indexes determine the profitability of the firm unit. These indexes are consisting of sale return ratio, return on assets ratio and equities return ratio. Necessary information collected from basic statements of affairs enclosure notes, meeting reports and documents of other companies in Tehran Stock exchange. Finally all of them were analyzed. According to this information, productivity indexes of labor forces and capital - based on the value added approach – was determined as dependent variable. In the next step, Profitability ratios of companies in the sample was determined as dependent variable and the relationship between dependent and independent variables was determined by statistical methods of coefficient of correlation.

Abstract One  of  the  most  important  characteristics  of corporation is  distinction between  ownership  and  management.  On this basis, manager exclusively available to access to apart of information   and   he/she is   responsible to preparing and transferring financial information. Because of  such  authority and  other  characteristics  such  as  characteristic  of  accounting  , because of  accruals (difference  between  cash  basis  income and   accrual  basis  income)  and   incentives  such  as  bonus incentive  , income smoothing, desert  of regulation, manager available   and  willing   to  manipulate   information   (income management),   specially  financial  information,  in  direct  of his/her benefit and in contrast with benefit of other groups. This   object, in this research and in form of four hypotheses, in connection of management bonus, prediction of bonus and income, income smoothing and monitoring of regulation of pricing is tested. These hypotheses are analyzed by regression analyzing and Wilcoxon test. On basis of research result and considering of limit in available to financial information of some statistic popular corporations, managers are willing to manage the income in periods that corporation  has loss or income, in order to increase the bonus; and  in profitability  periods, in order to smooth the income.

Abstract A conceptual framework of accounting can be decision based or accountability based. The choice critically affects the resulting framework. A framework that is decision based is centered on the decision maker, namely, the user of accounting information. Suppliers of accounting information might as well be inanimate objects since their interest in the now of information is not considered in this type of   frameworks. A framework built on the accountability relation, on the other hand, focuses on the relation between the accountor, the supplier of the accounting information, and the accountee, the user of the accounting information. In a decision-based framework, the objective of accounting is to provide information useful for economic decisions. It does not matter what the information is about. More information is always preferred to less as long as it is cost effective. Subjective information is welcome as long as it is useful to the decision maker. In an accountability-based framework, the objective of accounting is to provide a fair system of information now between the accountor and the accountee. It is built upon the accountability relationship between the two parties. Based on the underlying accountability relation, the accountee has a certain right to know, at the same time, the accountor has a right to protect privacy. More information about the accountor is not necessarily better. It is perhaps better from the standpoint of the accountee the not necessarily from the overall accountability relation. Subjective information can seriously damage the interest of the accountor, even if it is highly useful to the   accountee. Most conceptual frameworks seem to be decision based. They are unidirectional- oriented solely toward user. A conceptual framework that is accountability based must weigh the interest of the two sides; it is bidirectional.