Accounting and various aspects of finance
Mehdi Heidari; Alireza Aliakbarlou; Ebrahim Khakpour Heydaranlou
Abstract
Conservatism is an action that is used in conditions of uncertainty and limiting management optimistic behaviors to increase the reliability of financial statements. Financial distress and growth opportunities are among the factors that can improve the level of accounting conservatism. Meanwhile, managers' ...
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Conservatism is an action that is used in conditions of uncertainty and limiting management optimistic behaviors to increase the reliability of financial statements. Financial distress and growth opportunities are among the factors that can improve the level of accounting conservatism. Meanwhile, managers' behavioral characteristics are expected to influence the relationship between financial distress and growth opportunities with accounting conservatism. Therefore, the aim of this study was to investigate the effect of management uncertainty on the relationship between financial distress, growth opportunities and accounting conservatism. The results of this study show, the variables of financial distress and growth opportunities have a positive and significant effect on conservatism. Management overconfidence has no significant effect on the relationship between financial distress and conservatism but it moderates the relationship between growth opportunities and conservatism and has a negative and significant effect on the relationship between them. In other words, that managers with unfavorable financial situation do not have a positive outlook on the future situation of the company and increase the level of conservatism. Managers of large and growing companies also tend to opt for more conservative accounting practices to minimize their political and social costs. On the other hand, overconfident managers are optimistic about the future state of the company and reduce the level of accounting conservatism.
Javad Shekarkhah; seyyed hamid tamandeh
Abstract
Cognition and awareness of the firms' capital structure is important for potential shareholders and investors, and information on capital structure is used by creditors. The financing decisions of many firms depend on the market value of the stock. firms are issued when stocks are high and when they ...
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Cognition and awareness of the firms' capital structure is important for potential shareholders and investors, and information on capital structure is used by creditors. The financing decisions of many firms depend on the market value of the stock. firms are issued when stocks are high and when they are redeemed when stocks are low, the reason for this action is obtaining more finance. The purpose of this study is to examine the effect of market past values on investment decisions and Cumulative leverage changes of firms from the perspective of market timing theory.In this study, using financial information of 134 companies listed on Tehran Stock Exchange over the period of 2012-2018 and using generalized least square (GLS) regression analysis, the market timing theory was tested with growth opportunities and leverage changes of companies. Results of the study suggest that in a 95% certainty level, the first hypothesis was confirmed i.e. past market values have positive and significant impact on investment decisions. Also, the second hypothesis was confirmed i.e. past market values have negative and significant impact on Cumulative leverage changes. These observations confirm the market timing theory, that is, companies’ growth opportunities are controlled via the ratio, and leverage has a negative relationship with the ratio. Also variables of ratio of fixed assets and size of company have a significant and negative impact on investment decisions, while profitability, leverage, market value to liquidity ratio and liquidity have positive and significant effect on investment decisions. Finally, profitability and the ratio of total liabilities to total assets have a significant negative effect on the cumulative leverage changes.
