Financial Accounting Research
Year:2019 | Volume:11 | Issue:2 (40)|Papers Count:6

Cash holdings in the company, despite the benefits of the ability to conduct business transactions, are the basis for creating problems such as the potential increase of non-financial investments due to agency issues. Therefore, conservative accounting practices, due to the efficient use of cash held, can reduce the cost of representing conflicting incentives between shareholders and managers. Therefore, the purpose of this study is to investigate the relationship between the value cash held balance and conservative accounting with an emphasis on the of modificating role of controlling shareholders. A sample of 111 companies listed in Tehran Stock Exchange during the period of 2012 to 2016 is delected. To test the research hypotheses a multivariable regression model is used. The results show that, in the absence of controlling shareholders, with a higher degree of conservatism cash is held, in accordance with the results of the second hypothesis of research, the strengthening of the dominant control of shareholders, would reduce the positive effects of conservative accounting activities on cash value. The findings of testing the third hypothesis also suggests that strengthening the supervisory dimension of controlling shareholders does not increase the positive relationship between cash and conservative accounting.

This study investigate the effect of market frictions on financial constraints with emphasize on political connections and corporate governance. Based on Deng et, al (2017), factors of market frictions are information asymmetry, stock trading illiquidity and investor sentiment. Spread model is used for calculating the information asymmetry, stock turnover rates is used as proxy for stock trading illiquidity and investor sentiment. Also, WW index is used for calculating the financial constraints. In order conduct this study using the systematic sampling approach, 159 firms selected as a final sample during 2010-2017. In order to investigate the relationship between variables, multivariable OLS regression approach is used. For testing hypotheses we used Panel Data with Fixed Effects approach. The results show that there is a significant relationship between market frictions and financial constraints, namely market frictions increase the financial constraints. Existence of political connections increase the effect of stock trading illiquidity and investor sentiment on financial constraints. Also, existence of political connections are effective means in the relationship between information asymmetry and financial constraints and decrease this effect. In fact, the effect of political connections on the relationship between market frictions and financial constraints depends on firms conditions.

Considering the highly competitive environment, if a company cannot supply the required financing, it may encounter some problems in its operations. Companies are generally faced with two concerns on their financing conditions. The first concern is whether they have the required financial resources at a low cost in case of need while the second concern is whether they can repay their debts or not. Political connections are one of the factors that may affect the financing conditions of companies but have been less considered in research literature. For this purpose, the present study aimed at investigating the effect of political connections on financing policies. A sample including 150 companies listed on the Tehran Stock Exchange are selected and studied during 2011-2017. The findings related to testing the research hypotheses indicate that political connections have a significant positive effect on short-term debt ratio, long-term debt ratio, total debt ratio, and the cost of debt. In addition, the findings revealed that political connections have a significant negative effect on the credit rating of companies.

The main purpose of the present study is to investigate the effect of conditional conservatism on earnings quality based on price value relevance and the earnings response coefficients. Accounting reports have information content and conservatism, as a qualitative feature of financial information that, can affect the quality of accounting information and its relevance to stock values. In this research, two different measures, including price value relevance and earnings response coefficients, have been used to assess the quality of earnings. Conservatism is calculated using Khan and Watts' (2009) model. To test the hypotheses, data of companies listed in the stock market is used during 2013 to 2017. The research variables are analyzed using panel data and multivariate regression. The results show that there is positive and significant relationship between conditional conservatism and the earnings response coefficients. The results also indicate that there is a negative relationship between conditional conservatism and relevance to market value, but this relationship is significant only at the 90% confidence level. Accordingly, the results of testing hypotheses are consistent with the view that conservatism reduces the quality of financial reporting.

Marketing mix is an instrument managers use to affect the intention to purchase of the customers. Previous authors have developed the marketing mix of commodity and service products. But concerning to the classification of assets as real and financial assets, no marketing mix has been developed for handling the financial products goal market to now. In this study the authors try to develop the financial instruments marketing mix using field study and factor analysis in measurement models. The data is collected in 2018. The sample included 341 market practitioners in 10 classes including institutional investors, analysts, individual investors, foreign investors, steel industry investors, mutual funds, investment companies and so on. The results show that we can classify the managerial activities in six marketing mix: predicted return (including 10 elements), prestige credit (including 3 elements), perceived risk (including 6 elements), period scheduling (including 4 elements), perfection services (including 3 elements), and plasticity (including 4 elements).

Fraudulent financial reporting that is characterized as the intentional elimination or distortion of information by CEOs to mask their fraudulent performance is counted as a serious corporate crime. Therefore, various studies have been conducted to investigate the various factors influencing the likelihood of fraudulent reporting. In the same vein, the present study, focusing on an aspect of the financial reporting environment, aims at scrutinizing the association between financial statement comparability and the likelihood of corporate fraudulent financial reporting. For this purpose, De Franco et al. (2011) model is used to measure the comparability of financial statements and the approach offered by Ribar et al. (2014) and Rahrovi Dastjerdi et al (2018), based on audit fees is to measure the likelihood of reporting fraudulent. The sample of 89 companies listed on the Tehran Stock Exchange during the years 2013-2017 is selected. Then the research hypothesis is tested using a fixed logistic regression method and panel data. The results of the research reveal that financial statements comparability mitigates the likelihood of corporate fraudulent reporting. Based on the findings of the research, it can be concluded that financial statements comparability can increase the transparency and comprehensibility of financial reports, reducing the managers' opportunistic behavior and the likelihood of fraudulent reporting.