Financial Accounting Research
Year:2012 | Volume:4 | Issue:4 (14)|Papers Count:9

The purpose of this research is to identify users of the financial reports of Iranian municipalities, the information needs and the objectives which the financial reports are used. In order to conduct this study, a questionnaire was distributed to three groups; the first group includes financial administrative assistants, financial managers, chief accountants, income managers and audit managers working at municipalities of cities with a population of 500000 or more. The second group includes the members of council; and the last group includes the citizens, chosen from M.A and PhD students of accounting and the members of scientific committees of the same field in 5 universities. The results of 234 questionnaires were analyzed by means of appropriate statistical tests. The results show that the most usage of financial reports of municipalities belongs to the members of council, the senior managers of municipalities, analyzers and counselors and finally, the Minister of Interior. So these groups are in need of information for evaluating how efficient the activities of municipalities have been. Furthermore, the results show that these groups use the reports mostly for the purpose of evaluating the financial and operational accountability of the activities of municipalities.

One of the purposes of financial reporting is to predicting of cash flows that helps investors for economic decision making. A result of prior researches is ambiguous about information that has most usefulness in prediction of cash flows. Hence, the purpose of this research is to investigate the ability of net income and cash flows from operations to predict free cash flows. Also, an ability of Accruals Component in improvement of predicting free cash flows is investigated. This research utilizes panel data method with multivariate and univariate regression analysis and the data of sample of 78 firms during the period 2001-2010. Free cash flow is dependent variable and independent variables are net income, cash flows from operations and Component of Accruals. The results indicate that cash flows from operation in comparison with net income, has more ability in prediction of free cash flow. Also, adding Accruals Components in model of cash flows from operations improve the prediction of free cash flows.

This study examines the relationship between some corporate governance and audit fees in listed companies of Tehran stock exchange. There is a rich literature examining the level and nature of external audit fees requested by organizations identifying as key explanatory determinants, firm size, complexity of operations and audit risk. Corporate governance is a set of policies, methods and proceedings that are carried out to protect the interests of the firm’s stockholders and observe the accountability, transparency and fairness in firms, using internal and external mechanisms. Research documents that weak governance structures are associated with lower financial reporting quality and the incidence of internal control problems. Weaknesses in corporate governance are likely to increase the assessed inherent and control risks. The increase in these risks affects audit hours, leading to higher external audit fees. This study is descriptive correlation based on panel data analyzing. The 78 firms existing in Tehran Stock Exchange have selected as sample for time period 1384-1388. Hence, our examination shows that there is negative relationship between the audit fees and of independent directors and a positive association between CEO duality with the audit fees. In addition, we find that the relation between CEO duality and audit fees is strengthened for firms with dispersed ownership relative to firms with concentrated ownership.

As corporate governance is improving through the time, public firms have to follow its mechanisms for surviving in competitive markets. Cultural values have become subject of many studies and many of them are investigating the determinants and consequences of corporate governance as well. In this paper the relationship between cultural values and some corporate governance indices has been studied. For this purpose we have chosen Hofsted’s Model among different cultural models and percentage of non-executive directors and institutional investors on the board as proxies for corporate governance mechanisms. Sampled firms have been tested for three years from 2007 to 2009. Results show a significant negative relationship between masculinity and percentage of non-executive directors on the board. Also, there is a significant positive relationship between individuality and the presence of institutional investors on the board and a significant negative relationship between uncertainty avoidance and the presence of institutional investors on the board.

This paper examines the effect of market competitive Spectrum on the relationship between information asymmetry and the cost of capital in Tehran Stock Market (TSE). Accruals quality, the scope of the proposed purchase and sale price (the bid-ask spread) and the adverse selection component of the bid-ask spread are applied for measuring the asymmetry of information. Six hypotheses formulated and the research sample consists of 70 active companies listed on TSE in the period1383 to1388 and Fama and French model (1993) is applied for testing the hypotheses. The results indicate that the levels (spectrum) of the market competition affects on the relation between the information asymmetry and the cost of stock capital. Therefore, the degree of market competition is an important conditioning variable that should be considered when examining the relation between the information asymmetry and the cost of the stock capital.

Establishment of appropriate corporate governance mechanisms of action for the optimal use of resources, improves accountability, transparency, fairness and the rights of all stakeholders to participate. Each of the processes and mechanisms of inter-organizational and company activities are supervised and promote accountability and access to other corporate strategic goals. One of these mechanisms is the focus and ownership structure. This paper utilizes a simultaneous equation system to examine the relationship between ownership structure and performance of the companies listed in Tehran Stock Exchange using panel data for the period of 1382-88. The results indicate that the research focus and ownership structure do not affect the company’s performance of the companies listed in Tehran Stock Exchange. Also the ownership structure has significant effect on corporate performance.

This research examines the effect of corporate governance on conservatism in financial reporting. In this paper, conservatism has been measured by Khan and Watts (2009) model, and shares held by institutional investors, ownership concentration, board of directors’ independence and auditor type have been considered as corporate governance mechanisms. The statistic population of this research consists of firms listed in Tehran Stock Exchange (TSE), and 60 firms have been selected as the research sample using the systematic omission method. The analysis of multiple regression models show that institutional investors, ownership concentration and board of directors’ independence have no effect on accounting conservatism. However, accounting conservatism is lower in years with the audit organization as auditor. Furthermore, in this research, some control variables’ effects have been considered.