Empirical Studies in Financial Accounting

Abstract Economic decision-making needs information; lack of information results ambiguity of decision. Financial reports provide most of the information needed in process of decision-making (D-M). Previous researches indicate that the accounting earning (AE) is the sole and the most used item of accounting information in economic DM, therefore the earning quality (EQ) is very important to investors and creditors. This research study indicates the effect of accounting conservatism to the earning quality and stock return. The result shows that some of the changes in Return on Asset (ROA) can be using conservatism procedures, which reduce quality of earning.

Abstract Professional Judgment is one of the major elements of auditing. Auditors continually use their Professional Judgment both to judge whether the accounting treatment used by the preparers of financial statements are according to Accounting Standards    and   to   Judge   how    to   carry   out   their     audits.  Recognition of the sense of auditors’ professional Judgment and factors affecting their professional judgments is essential so that the auditors judgment s are applied appropriately and this not to lead to freedom of auditors from any discipline or auditors to carry out unlimited liberty.  Recognition of professional Judgment dimensions in auditing can also clarify which characters desire to make professional judgment and which environment factors influence their professional judgments. Research findings suggest that knowledge, experience, integrity, independence, moral behavior, professional skepticism and field independence are the most important personal characteristics of auditors, which affect their professional judgment and professional oversight, accountability necessities, existence of audit programs and check lists and clarity of Accounting and Auditing Standards are the most influent audit environment factors affecting auditors’ professional judgments.

Abstract The firms' capital structure plays an important role in investment decision making. The main goal of this paper is review the relationship between capital structure and profitability measures in Tehran Stock Exchange. Therefore 189 sample firms that their required data for a nine years period (1375-1383) was available are selected. Then the relation between profitability ratios and capital structure is reviewed. Four industries of sample statistic, that had more firms, are selected to examine the hypotheses too. The panel data regression is used to examine the hypotheses. Signification of the models is examined by T and F statistics.

Abstract In this article what studied is perceptive the theory model and quality of this relation and assessing the parts of risk for each management assertion. This article states the results of  a study there have assessed the  relation  between  inherent  risk  and control  risk  for  any  existing  assertion  in  any  account two hypotheses are made for this research. In order to test hypothesis, survey and normal distribution were the devices of collecting information. The test was done in 5% mean level. The statistical society of this research was the members of formal accountants' society. The results indicate meaningful relationship between inherent risk and control risk. And the auditors didn't distinct for any existing assertion in any account of inherent risk and control risk in their assessments.

Abstract This   study   investigates   the    effects    of    differential accountability pressure strength on auditors’ materiality judgment. We evaluate whether incremental levels of accountability (i.e., review, justification, feedback) increase judgment conservatism, decreases variability, and increase effort. Eighty four auditors participated in a between -subjects experiment   that   included    a   planning    materiality    task.   As predicted, auditors under higher levels of accountability pressure (i.e., justification, feedback) provided more conservatism materiality judgment and had less judgment variability than auditors under lower levels of pressure (i.e., review, anonymity). The results also indicate that accountability strength was positively related to the amount of time spent on the task and explanation length. We consider implications for research, practice, and policy in the context of the studies limitations.

Abstract In this research, the effect of firm size, current ratio Total liabilities/ total assets ratio and accounts receivable/total assets ratio variables on qualified audit report and relationship between previous year's audit report and audit firm’s type with qualified audit report were investigated. By investigating the qualified and unqualified audit reports for Tehran stock exchange firms during 1381-1383, the information of 144 firms were collected. The results of Logit regression and chi-squared independence test show that the current ratio and accounts receivable/ total assets ratio affect the qualified audit report. However, it shows that   there is a significant relationship between previous year’s audit report and audit firm’s type with qualified audit report. But, firm size and total liabilities/total assets ratio have no effects on the qualified report.