Journal of Empirical Research in Accounting
Year:2019 | Volume:8 | Issue:32|Papers Count:15

Conservatism and value relevance are both the main subjects of researches included in accounting literatures. The recent value relevance decreases are, according to some academics, due to increased conservative accounting because conservatism prefers credit to relevance. So this research investigates the relation between conditional conservatism and value relevance of financial reporting and their trends. This study is an applied and descriptive-correlation research in terms of the aim and the nature and method of implementation, respectively. The sample consists of 930 firm-year observations for the period from 2011 to 2015. The research findings indicate that there is a significant positive relation between conditional conservatism and value relevance of financial reporting, that is, an increase in conservatism leads to improvement of information reliability and consequently, an increase in the value relevance of financial reporting. Moreover, findings show that conditional conservatism and value relevance of financial reporting have had an incremental trend in this period.

Earnings Management is a deliberate manipulation of financial reporting in order to achieve an expected level of earnings. So, earnings may increase, decrease or smooth based on various management's goals and objectives to mislead the stakeholders. It seems that the short-term debt structure can have regulatory benefits because it leads to greater monitoring by creditors and, as a result, reduces the earnings management. The purpose of this study is to investigate the effect of monitoring through short-term debts on accrual-based earnings management. The sample consists of 136 firms listed in Tehran Stock Exchange during the period from 2010 to 2015. The discretionary accruals criterion calculated using Simon and Fang model (2014), is applied to measure accruals-based earnings management. The research method is the correlation method and data analysis method is the multivariate regression model. Results indicate that there is a significant relation between short-term bank debts and accruals-based earnings management in low-rated firms. Also, Findings show that there is no significant relation between short-term bank debts and accruals-based earnings management in high-risk firms.

This paper reviews impacts of earnings management on disclosure extent and true financial performance. This Research shows that the net disclosed earning is dependant to conditions such as a firm's information quality. The sample consists of 191 firms listed in Tehran Stock Exchange subject to increase of disclosure extent, over the period from 2010 to 2015. Findings reveal that there is a significant positive relation between disclosure quality and true financial performance of firms (measured by the adjusted assets return and equity return). The results show that a firm's disclosure is likely to result in benefits, but after an optimum level, increasing disclosure may decrease its true financial performance. This optimum level does not change when there are differences between firms' monitoring environments (e. g., independent board). These results indicate that intense monitoring of chief executive officers has no effect on the disclosure extent of a firm.

The main objective of the research is to examine the asymmetric persistence and market pricing of accruals and cash flows in firms listed to Tehran Stock Exchange. The research method is post-event type and the statistical population of the research is firms listed in Tehran Stock Exchange during the period from 2009 to 2016. To analyze data, the linear regression model (data panel) is used. The results show that, at the economic loss, expected returns can not reflect the profit accruals persistence. Also, at the economic loss, expected returns can not reflect the cash profit components persistence, in other words, the research hypotheses are not rejected for market inefficiency and this study is useful for understanding the anomaly accruals in relation to the accruals dynamics, as well as for researchers interested in the MT framework to test the rationality of more general investor expectations.

The main purpose of this research is to investigate the effect of auditor's proposed reforms on the earnings quality. The sample consists of 165 firms listed in the Tehran Stock Exchange during the period from 2009 to 2016. Paired t-test is used to test the research hypotheses. According to the findings, there is no significant difference of smoothness and sustainability between unaudited earnings and audited earnings. In addition, evidence shows that audited accruals have a higher quality as compared to unaudited accruals. Moreover, results show that the extent of positive accruals changing into negative ones is more than negative accruals changing into positive ones after auditing. According to the results, there is no significant difference of negative accruals amount between audited and unaudited financial statements. Also, findings show that the positive accruals amount in audited financial statements is less than it in unaudited financial statements. Finally, the results show that there is no significant difference of inconsistency in profit distribution about zero between the time before auditing and after it.

Accounting information provides a system through which intraorganizational information is transferred to capital markets and allows more control of management activities by investors. Information provided by financial reports can be useful in decision making when it is reliable and relevant. The statistical population of this study is all firms listed in Tehran Stock Exchange and the sample selected by systematic removal method, consists of 105 firms listed during the period from 2007 to 2016. To test the variables relation, the regression analysis method based on panel data model is used. Results show that the quality of accruals, profit sustainability, profit forecast and profit smoothing are effective on operating cash flow.

Certainly, the behavior of firms in each life cycle stage has a significant impact on their value. The resources available in an organization help achieving its goals and objectives. Human resources have been considered as an investment source by managers of all economic units and social institutions in order to improve their performance level and efficiency. This paper investigates the relation between human resources investment and internal control in the framework of the firms' life cycle. The sample consists of 90 firms listed in the Tehran Stock Exchange during the period from 2006 to 2016. The study uses the number of personnel in an internal control department as a dependant variable and applies the panel data method is used for data gathering. The results indicate that variables such as firm size, firm life, activities complexity, financial crisis, exports, and state and private ownership have impact on the number of personnel in the internal control department. As a whole, all of the variables mentioned above, with the exception of financial crisis and private ownership have a significant positive effect on the number of employees in firms and their internal control department. The findings also show that mature firms have a greater explanation power for the relation between human resources investment and internal control systems than the firms in the growth and decline stages.

This research aims to examine the relation between political costs and tax gap using structural equation modeling approach. The sample consists of 66 firms listed in Tehran Stock Exchange for the period from 2006 to 2013. Political costs are measured using the observable variables such as capital intensity, concentrate rate, firm size, employee intensity and risk, and tax gap is measured using the difference between determined tax and declared tax. In addition, this study considers profitability and leverage ratio as control variables. The results indicate that there is no significant relation between political costs and tax gap, therefore, there is no empirical evidence on the relation between political costs and the tax gap in Tehran Stock Exchange.

This paper aims to investigate the non-linear relation of debts ratio to product market competition and profitability. Product market competition is measured based on two criteria of market share and market size. Market share indicates the competition on behalf of existing competitors and market size indicates the competition on behalf of potential competitors. The whole business environment and the homogeneousness of production are used to measure these two criteria of product market competition. Earnings before interest and taxes are used in order to measure profitability. The sample consists of 91 firms listed in Tehran Stock Exchange during eight years from 2008 to 2015. To test the hypothesis, the non-linear regression model is used. The results indicate that there is a non-linear, third grade and cubic shape relation between the product market competition criteria (including market share and market size) and debts ratio and there is a non-linear, second grade and U-shape relation between profitability and debts ratio.

Lack of proper corporate governance mechanisms can pave the way for management opportunistic actions one of which is to lead tax avoidance activities towards their own benefits, which in turn may waste tax resources. The purpose of this paper is to investigate the effect of intellectual capital on the relation between corporate governance and tax avoidance of firms listed in Tehran Stock Exchange. The sample consists of 94 firms listed in Tehran Stock Exchange during the period from 2010 to 2015. The data is analyzed through regression model using panel data. The results indicate that intellectual capital does not modify the relation between corporate governance mechanisms and tax avoidance. This means that corporate governance mechanisms affect tax avoidance directly and intellectual capital does not play any role in it. In particular, findings show that strong corporate governance leads to improvement of financial reporting quality and, ultimately, helps the effectiveness of tax planning actions.

This study investigates the accuracy of recognition and estimation of the cost stickiness by master accounting students, in different presentation conditions and the impact of their cognitive bias on their judgments. This study uses questionnaire to collect data from the sample consisting of 120 people from the population of 171 master students in accounting, auditing and management accounting fields in Tehran in the year 2017. ANOVA is used to analyze the data and test the hypotheses of the research. The results show that the degree of cost asymmetry and the way in which information is presented to accountants affect their judgment accuracy. Therefore, the cognitive bias resulting from the different degrees of cost asymmetry and the different data presentations (in percentage or in amount) affect the recognition and accuracy of their judgments about cost stickiness.

The fast-paced process of transformations in the field of Information and Communication Technology (ICT), especially Internet, has affected all dimensions of human societies. For example, in the field of accounting it has introduced a new and revolutionary method for financial reporting, which is called internet financial reporting. Considering the importance of this kind of reporting that can have a significant effect on the decision making of financial information users, this study seeks to investigate the effects of this new reporting method on the value of firms listed in Tehran Stock Exchange. The research is an applied and descriptive-correlation one. The sample consists of 112 firms selected from all firms listed in Tehran Stock Exchange by systematic exclusion method. The study is also cross-sectional and uses financial information and explanatory notes of sample firms in 2016/3/19. According to the results, the percentage of Internet financial reporting and the percentage of content items of internet financial reporting have a significant positive effect on the firms value, but the percentage of presentation items of internet financial reporting has no effect on the firm value.

The purpose of this study is to explain the role of gender diversity in the value relevance of social responsibility reporting. When a firm deals with the social responsibility issue, executives and stockholders gain incentives to obtain potential benefits. On the other hand, the existence of gender diversity in a firm reflects its commitment to social laws and regulations and can affect the reputation and, ultimately, the value of the firm. This study is a post-event, causal and applied research. The sample consists of 156 firms listed in Tehran Stock Exchange during the period from 2012 to 2016. To test the hypothesis, panel data method and multivariate linear regression analysis are used. Findings show that social responsibility has value relevance in line with the theory of legitimacy. Gender diversity also increases the firm value based on the agency theory and also increases the value relevance of corporate social responsibility reporting.