Financial Accounting Research
Year:2020 | Volume:12 | Issue:1 (43)|Papers Count:6

The usefulness of information provided by managers depends on the readability and ability to understand financial reports. According to the signaling theory, capable executives are not only reluctant to sophisticate and complicate their desirable performance, but in order to inform investors and financial analysts of their desirable performance and capabilities, publish more readable and understandable financial reports. Therefore, based on this argument, the present study uses a structural equation modeling approach to examine the relationship between financial reporting readability and the cost Agency and the study of the moderating effect of managerial ability on this relationship. To this end, the financial reporting readability of the company is evaluated using three Flash indicators, the Gunning Fugue Index, and the Text Length Index. The statistical sample of this study consists of 116 listed companies in Tehran Stock Exchange between 2013 and 2017. After reassuring the appropriateness of the measurement and structural models of the research, the findings suggest that readability financial reporting reduces the cost Agency. In addition, the results indicate that the ability to manage a negative relationship between financial reporting readability and the agency cost is exacerbated.

The main aim of the present study is to investigate the relationship between information asymmetry and the two informative and deceptive dimensions of income smoothing considering the moderating role of audit quality. To measure audit quality using factor analysis approach, a composite index was constructed by auditor tenure, audit firm size, optional accruals, and industry expertise variables. The bid-ask spread model also is used to measure information asymmetry. Research hypotheses were examined using required data from 106 of listed companies in Tehran Stock Exchange during 2009-2018. The results indicate that information asymmetry has a negative and significant effect on informative earnings management, but a significantly positive effect on deceptive earnings management. The results also indicate that when the audit quality is high, it significantly reduces the intensity of both the negative and positive effects of information asymmetry on the informative and deceptive income smoothing respectively.

When competition becomes more intense, the comparability of proprietary costs (business strategy) increases because managers in formulating their competitive strategies, often relate to financial information of their competitors. As a result, the greater the ability to compare, the risk of displaying proprietary information is accelerated through the mandatory disclosure of financial statements. The aim of this research is investigation into the effect of business strategy on the financial statements comparability with an emphasis on the role of information asymmetry. In this regard, 126 companies were selected for the period of 8 years during 2009-2017. Collected data were analyzed using Stata statistical software (version 15). The results showed that business strategy (aggressive strategy and defensive strategy) has a positive and negative effect on financial statements comparability, respectively. It was also found that the simultaneous effect of information asymmetry and business strategy (aggressive and defensive strategy) has a negative and positive effect respectively on financial statements comparability.

The present study aimed to explain and determine the importance of effective factors on the effective evaluation of internal controls in the companies listed on Tehran Stock Exchange (TSE) during 2018-2019. The initial variables of the model were identified by content analysis technique. Then, for screening the identified variables, the opinion of 19 academic experts in internal control who were selected using purposive sampling were collected. 68 indicators in the form of 8 main criteria were presented using fuzzy Delphi technique in two stages. Then, the factors were prioritized using pairwise comparison questionnaire and fuzzy network analysis process technique. The findings of prioritizing the factors indicate that among the main criteria, the characteristics of the internal auditor are the most important factor in the effective evaluation of internal control. Then, the structure of board of directors, the characteristics of the independent auditor, and the process factors are ranked in the next priority. Also, ownership structure as the least important criterion is in the eighths rank. Therefore, identifying, explaining, and considering the importance of prioritizing the effective factors on the evaluation of internal controls provides a ground for enhancing effective evaluation of internal controls.

Earnings management is influenced with environmental factors that can be theoretically analyzed by agency theory. From a legal perspective, agency dilemma represented with principal – agent problem. It can be in common ground with accounting. This problem causes to the moral hazard that can be raised in the form of information asymmetry via the relationship between manager and shareholders. Property rights protection is a manner to control the moral hazard. The purpose of this study is to examine the legal variables effect on earnings management in listed companies in Tehran Stock Exchange by utilizing the concepts of institutional economics, property rights institution and principal – agent problem. Therefore, the relationship between property right index and its components with earnings management was examined thorough GMM method using collected data of 94 of the listed companies in Tehran Stock Exchange during 2011-2017. According to the results, protection of property rights is significantly reduce earnings management. Furthermore, reinforcement of rule of law, political stability, corruption control, access to loan, intellectual property rights protection, patent protection and facilating property registration process will control the earnings management.

Corporate social responsibility (CSR) has become one of the standard business practices of our time. For companies, the overall aim is to achieve a positive impact on society as a whole while maximizing the creation of shared value for the owners of the business, its employees, shareholders and stakeholders. Consequently, there has also been an increase in the number of social reporting requirements driven by regulatory bodies and stock exchanges around the world that have played a key role in advancing the field of corporate social reporting. The present study contributes to this field and by adopting Delphi method and identifying the dimensions, components and indicators of social responsibility disclosure, a framework for assessing CSR disclosure incorporating 3 dimensions, 22 components and 68 indicators was designed. Then, these dimensions, components and indicators were ranked by using expert’ s views and the results show that the ratios of environmental, social and economic dimensions are 0. 55, 0. 35 and 0. 1, respectively. Among the indicators, the measures taken to reduce greenhouse gas emissions, its technologies, and greenhouse gas elimination criteria with the ratio of 0. 06 were considered as the most important indicator. Also, the review of CSR disclosure reports of 330 companies for year 1396 indicates that only 9 out of 68 indicators were disclosed by each of the companies on average, and in the total sample, the highest number of disclosures is related to economic indicators with 1632 cases followed by social indicators with 1490 cases and environmental indicators with only 360 cases, which represent 27. 5%, 11. 5%, and 7% of the disclosure cases, respectively. Meanwhile, the study shows that 85 of the 330 companies did not disclose any of the environmental indicators, which indicates that some companies still do not pay adequate attention to the most important aspect of social responsibility disclosure.