JOURNAL OF ACCOUNTING AND AUDITING RESEARCHES (ACCOUNTING RESEARCH)
Year:2009 | Volume:1 | Issue:1|Papers Count:12

This study examines the impacts of corporate governance mechanisms on agency costs among firms listed on Tehran stock exchange. Agency relationship is a contract under which a principal engages an agent to perform some operations, and also delegates some decision making authority to him in this way. By forming agency relationship, agency costs, arising from conflict of interests between parties are generated. Agency costs have an inverse impact on the firm's value; firms, therefore, are about to control and mitigate such costs. In our study, agency costs are defined as the interaction of the firm's growth prospects and its free cash flows. We used Tobin's Q as a proxy for the firm's growth prospects. Among agency costs mitigating mechanisms, institutional ownership, percentage of nonexecutive directors, and debt ratio are used as independent variables. We also tested hypotheses using a pooled cross-sectional OLS regression. Our study provides evidence on a negative and significant relation between percentage of non-executive directors and agency costs of the firm. Also the same relation is observed between levels of institutional ownership and the firm's agency costs. Furthermore, our findings were inconsistent with the hypothesis that there is a relation between the firm's debt ratio and its agency costs.

Firms make use of different financial resources in different ways in order to perform profitable projects and to attain the maximum of the return for increasing the wealth of their shareholders. The ability of the firm in specifying internal or external resources for preparing capital and appropriate financial programs is one of the original factors in development of every firm. These resources of financing and the extent of the use of them are one of the factors influencing operating performance of firms. In this respect, we investigate how financing, magnitude and type of that affect the firm's previous and future operating performance. So, on the basis of literature, four hypotheses were defined. The statistical sample of this research consisted of 64 firms chosen from listed in Tehran Stock Exchange during 7-years period 1379-1385.The hypotheses were analyzed by using two variables regression, matching technique and F and t-test. The results show that financing doesn't have any effect on previous arid future operating performance; also, magnitude and type of that doesn't have any significant effect on the most of criteria of operating performance.

After challenges about CAPM, Fama & French 3 factors model could explain several return anomalies. Recent studies show that capital productivity effects on stock returns and the strategy of selecting productive firms could lead to excess return on the base of expected return of Fama & French 3 factors model. In this research, we show that capital productivity in Tehran Stock Exchange (TSE) could be a source of excess return too, and increases alpha in portfolio assessment. We used data of firms in TSE during 8 years from 2000 to 2007. Finally the application of capital productivity factor with the other 3 factors could explain the return anomaly and excess return of productive portfolios arid enhanced the adjusted R2 of the model.

The article set out to compare the explanatory power of neural network models and ordinary least-squares regression to estimate Initial Public Offering (IPO) prices. The aim is to design a model to help investors to identify the accuracy of pricing of IPOs and use profitable opportunities. Therefore the variables used in this research are selected from those available to outside investors immediately before the flotation. On the other hand, the results of this paper can be useful for the issuing firms, consultants, underwriters and regulators of Tehran Stock Exchange. The results show that using neural networks reduces the accuracy of pricing of IPOs to some extent and makes no advantage over regression models.

This study investigates the dividend policy behaviour of firms listed in Tehran Stock Exchange (TSE) during 1380-1384. The study updates and extends previous research on dividend policy behaviour and analyses empirically whether the firms listed in TSE follow stable dividend policies in a regulatory environment that imposed mandatory dividend policies. The findings show that the firms listed in TSE follows unstable cash dividend policies and the main factor that determines the amount of cash dividends is the earnings per share (EPS) of the firm in that year.

Development of capital market has led to the development of companies and making the transactions of the companies stock easy which has changed the investor's expectations. Today investors pay more attention to the changes in the market value of their investment instead of annual dividend. This fact has caused changing in the criteria of management. performance evaluation and leading the operation of companies toward value creating for shareholders. This research aims at studying the ability of types of internal criteria of management performance evaluation in explanation of changes in stock market value of the listed companies in 1379-1385. In the present research by use of Forward Regression Test the ability of traditional accounting criteria and new criteria based on value added in explanation of changes in Market Value Added (MVA) were studied. The results of the study at the level of significance of 95% showed a higher explanation ability of Economic Value Added (EVA) in comparison with traditional accounting criteria and Cash Value Added (CVA) and Refined Economic Value Added (REVA). Therefore Economic Value Added is the most relevant criterion in management evaluation for value creation for shareholders.

In decision making process, investors focus on information such as earnings per share forecasts and they use this information in stock pricing. Therefore, earnings forecast error is important information for investors because investors' decisions about stock purchase, sell and holding is based on this information. Thus, earnings forecast error is a main factor in secondary market performance. This study examines the relative information content of value added (including economic value added and cash value added) beyond earnings and operating cash flow. Thus, the relationship between earnings forecasts error and changes in value added, cash value added, earnings and operating cash flow, was examined based on data gathered of production companies at Tehran Stock Exchange (TSE) in the period of 2001 through 2006. For testing the hypotheses of this research, regression method and GLS technique was used, for both cross- sectional and pooled data. The result shows that: Economic value added and cash value added based on pooling data have significant positive relationship with earnings forecasts error, but operating cash flow and earnings neither has· significant relationship with earnings forecasts error. Economic value added and earnings based on cross sectional data have significant negative relationship with earnings forecasts error, but operating cash flow and cash value added neither has significant relationship with earnings forecasts error. Economic value added has greater information content in comparison to cash value added, earnings and operating cash flow.

This Paper examines the effects of income smoothing on the information content of earnings. The research question is that whether income smoothing garbles earnings, or improves the information content of earnings for predicting earnings, operating cash flow, and accruals. In the research, we have developed three hypotheses to answer the question. For the purpose of hypotheses testing, a sample of companies listed on Tehran Stock Exchange is used. Income smoothing is measured through negative correlation between the changes in discretionary accruals (DDAP) and 1. changes in earnings pre-discretionary accruals (DPDI). To estimate the discretionary accruals, the cross-sectional version of modified Jones model was used for a period of 1997-2004, then to test research hypotheses following Collins et al (1994), the primary and extended models estimated. For estimating the models, we use financial information of the sample companies for the period of2000-2006.The results show that income smoothing increases the strength of income for forecasting earnings and operating' cash flows but dose not for accruals.

Timeliness is one of the important qualitative attributes of financial statement. Timeliness requires that information should be made available to financial statement users as rapidly as possible. It has been argued that the shorter the time between the end of the Accounting year and publication date. The more benefit can be derived from the Audited annual reports. The longer the period between year end and publication of the annual report the higher the chances that the information will be leaked to some interested users. The objectives of this study are to investigate the association between size, age, debt- equity ratio, profitability, audit opinion and audit delay. The sample comprises Production Company listed in Tehran stock Exchange during the period 1377-1385. The result of testing the hypotheses of the study proved to be significantly associated between Audit delay and size, age, debt- equity ratio, profitability and audit opinion.

In recent years, the link between future cash flows and firm value is well accepted by financial economists and there has been renewed interest in cash flows. On the other hand, Current financial reporting practices have traditionally emphasized on accrual earnings. Thus, the purpose of this study is To assess the relation-ship between accrual earnings risk (beta) and cash flow risk (beta) with market risk (beta). Also, another purpose of this paper is to assess whether. Cash flows possess incremental information beyond accrual earnings in the explanation of systematic risk by using a set of pairwise regressions. The Results of study indicate that the both information of accounting, earnings and operating cash flow, have statistically significant association with systematic risk in the period of 1999-2005, and so, this information can use for anticipating systematic risk. Additionally, the result reveals that the accounting earnings information has incremental information content relative to cash flow information. Therefore, in the time of decision making, the accounting earnings information can be preference related to cash flow information.