The Financial Accounting and Auditing Researches
Year:2013 | Volume:5 | Issue:18|Papers Count:8

Financial statements have been considered as the most significant part for contributing the financial reporting process, assessing financial position, performance and flexibility of companies. In general, the field of activities of companies is very various and these are always faced with so many economical events, so it is not possible to define some specific regulations for reporting those events. In this case, there is an emphasis for financial statements preparers to apply professional judgment in accounting standards. In this study, we are going to elaborate whether the application of professional judgment in Iran accounting standards will affect the quality of financial information such as comparability and reliability of them? And if accountants intend to change the financial information for his benefit, does the professional judgment let them to do that and work as an appropriate tool for their goals? For considering the subject of this research, we have used a combined design in order to measure the effects of financial statements preparers’ decisions on comparability and reliability of the information by using professional judgment. The empirical evidences have been collected to demonstrate whether the level of applied professional judgment in Iran accounting standards, can have any influence on comparability of financial statements. Findings of this research show that using professional judgment in accounting standards will decrease comparability of financial reporting. Empirical findings of this research show that the accountants which are put in an suitable circumstance for moral hazard in comparison to other people who are not in such situation, use their professional judgment to demonstrate better performance for their company and gain more benefits.

Evaluation of conditional conservatism based on the sensitivity of accounting earnings to economic bad news (negative stock returns) to pervasive feature of empirical research in accounting information has become. Improving the quality of accounting information, market information processing, prices will lead to an appropriate level of investment risk by reducing the fluctuating stock prices dropped, resulting in reduced cost of capital. In this study, to evaluate the conditional conservatism as a risk factor, the data of 100 listed companies in Tehran Stock Exchange during the period 1382 to 1389 has been studied. Research findings show that conditional conservatism is considered a risk factor and the risk premium will be affected.

Stock return, firm size, earning volatility and cash flow volatility, are important variables in financial and accounting issues, which considering them can improve the quality of decisions. Therefore, this research study whether stock return in firms with smoother earning significantly different from firms with smoother cash flows. On the other hand, this research tests the same question, with the firm size instead of stock return. Statistical population includes firms listed in Tehran Stock Exchange (TSE), which based on considered conditions, 50 firms have been selected during 1999-2008. T-test has been applied for hypothesizes test. Results indicate that, there is no difference between average return of two groups of firms that categorized according earning and cash flow volatilities cycle, but there isn’t difference between firm size in the two groups of firms.

The purpose of this paper is investigating the relationship between the elements of intellectual capital and earnings management for companies listed in Tehran Stock Exchange. Samples of 77 companies during 1385 to 1389 in the total level and for level of industries were examined. To determine discretionary accruals as earnings management indicator (dependent variable), the Modified Jones Model (1995) has been applied.In addition, the criteria of intellectual capital in the total level and for level of components include human capital, structural capital and physical capital as independent variables have been measured by Pulic model. Also, control variables involve industry type, percentage of managerial ownership, firm size, board size, percentage of non-bounded board members, presence of woman members in the board director.Multiple regression has been applied to test the research hypothesis at a=5%.The findings suggest any significant relationships between the elements of intellectual capital and earnings management. It means that companies listed in Tehran Stock Exchange by intellectual capital disclosing don't manage earnings and don’t use competency advantage to manage earnings. Since earnings management may be opportunistic or be aligned with stockholders interest to increase the firms value, so it's suggested to managers that they can help to increase firms value by intellectual capital disclosing.

In Iran, according to "the rule of the trustworthy audit firms of the stock and exchange organization (2007)", after 4 years of audit services, audit firms are not allowed to accept the position of the CPA of the listed companies. The purpose of legislators is to increase the independence of auditors, because they believe the independence of auditors will be decreased in long auditor tenure. This subject was attractive for Researchers to study the effect of auditor tenure on the accounting conservatism to know what will happen in a long tenure. We also test the effect of the auditor type (Audit Organization or other Firms) on the conservatism Index and we used the model of Givoly and Hayn (2000) to measure the conservatism. The statistical society includes the listed companies in Tehran Stock Exchange from 2003 to 2010. The result of the study indicated that, there is a positive significant relationship between auditor tenure and accounting conservatism, in our opinion, mandatory auditor rotation does not help to increase the accounting conservatism, and therefore we feel the necessity of the revision in the law of mandatory auditor rotation. On the other hand we found that the relationship between auditor types and accounting conservatism is not significant and it means there is no significant difference in accounting conservatism between audit organization and other firms.

The purpose of this study is Investigation of membership effect in business group on the firms’ effective tax rate. The study sample consisted 67 Firms listed in Tehran stock Exchange during the 1381 to 1389 and effective tax rate has been calculated by dividing the tax expense on profit before tax. For testing the research hypothesizes have been used T-test and Ordinary Least Squares regression (OLS). The result shows that effective tax rate of the group member firms is significantly less than independent firms.Also there isn’t significant relationship between interaction of profitability and group with effective tax rate. In other words, there isn’t significantly difference between positive association profitability before tax and effective tax rate in business group member firms and independent firms.

Financial reports are major instrument to publish information for stakeholders. The purpose of interim financial statements is to improve the timeliness of accounting information.In this paper, we have examined the determinants of interim financial statements timeliness in Tehran Stock Exchange. Study sample are about 84 firms in a four periods from 2006 to 2010. We have found there is a relation between unqualified audit report and auditor type with interim financial statements timeliness.The results of this study show that in emerging markets such as Tehran capital market, interim financial statements timeliness is more depend on unqualified audit report and auditor type. when the audit report is unqualified, time of the interim financial statements presentation will be decreased. The results also show when audit firm is Audit Organization time of the interim financial statements presentation will be increased.

In the present era with growth of knowledge-based economy, companies intangible assets and intellectual capital are keys to achieving sustainable competitive advantage. Intellectual capital literature overview, demonstrate considerable attention to assessment, valuation and reporting it. Considering the growing importance of this category of knowledge management, in this study, first, intellectual capital of pharmaceutical companies calculated with using the Pulic model in five-year over the period 1383 to 1387 and then review the effects of three variables formed the intellectual capital including human capital, communication/customer capital and structural capital on the q-tobin ratio (Q) as a measure of corporate performance.Descriptive study methods-qualitative and as objective, is applied. For evaluating of intellectual capital and q-tobin ratio (Q), necessary data was gained out of the financial statement of the companies and Tadbirpardaz and Rah avard novin software.The results of the study show that independent variables of communication/customer capital and structural capital had positive effect on q-tobin ratio (Q) but the independent variable of human capital had negative effect on q-tobin ratio (Q) of the companies understudy.