THE IRANIAN ACCOUNTING AND AUDITING REVIEW
Year:2006 | Volume:13 | Issue:43|Papers Count:12

The main purpose of this research is examining the effect of information technology (IT) on qualitative characteristics of accounting information. So, the main question of the research was stated as follow: How does IT influence each of these qualitative characteristics? Due to the point that the accounting information resulted from financial reporting, so at first, the reporting which applied IT was inspected and the information extracted from the reporting was then evaluated as a matter of quality. In order to determine the influence of IT on qualitative characteristics of accounting information; first, by wide review of literature, the logical network of influence of IT on qualitative characteristics of accounting information was drawn up. Then, research hypothesizes was made up considering the relation between .main part of the network. Finally, in order to verify the hypotheses, T test, ANOVA, Duncan and Tukey tests were used. Based on the results of this research, IT increases relevance of accounting information and decreases their reliability. In addition, IT increases comparability, but not extensively.

Results of several researches in Iran clearly confirm the inefficiency of the TSE. In this inefficient market, investors seek to find high performance companies. But the key question is how high performance companies can be identified. Ranking of companies regards as one of the easiest approaches. In literature, there are various ranking approaches each with its own indicators. This paper is to provide the results of the comparative study on the Tehran Stock Exchange (TSE) companies' rankings based on accounting profitability ratios and the TSE's excellence indicators. Using correlation tests, we found a weak correlation between companies’ rankings was calculated based on the accounting profitability ratios and the TSE rankings. This findings means that a highly ranked company by the TSE's ranking system may not be necessarily highly ranked based on accounting profitability ratios or vice versa.

We developed two logit models for prediction the rating of return on stock (ROS) and return on equity (ROE), for accepted firms in Tehran Stock Exchange (TSE). The first phase of study examines that" do exists any significance statistical differences between the financial statement data of successful and unsuccessful firms?", in a cross-sectional sample. The results proposed that, there are some significant differences between the two groups, from the points of financial activity indexes, liabilities position (financial leverage), average size (in terms of book values), and kind of industries. However, the differences for liquidity not passed the test of significance. We developed the logit models with a quasi-experimental methodology. They predict the rating of the firms with a reasonable accuracy. However, the ROE based model has higher accuracy than the ROS based model, and its statistics are better, too.

In this research we have investigated the returns to technical analysis and buy and hold strategy on the Tehran Stock Exchange. We have assessed whether one simple form of technical analysis named by Dual Simple Moving Average (DSMA) can predict stock price movements. To that end, we have used daily data for prices of the 31 firms of the Tehran Stock Exchange, covering the six-year period from 21 March 1999to 20 March 2005. Also we have divided relative period to two subperiods including three years and six years periods. Our findings indicate that In the three and six years periods, returns means that is obtained from studying DSMA both with and without considering transactions costs are equal to those achieved from the buy and hold strategy. Moreover, our results show that transactions costs reduces strongly returns mean that is obtained from studying Dual Simple Moving Average.

This paper examines the relative and incremental information content of cash flows and accruals in Iranian capital market. For this purpose, we examined the relationship between stock returns and earnings and its components for 400 firm-years in Tehran Stock Exchange during 2000-2003. The results show that earnings have greater information content than cash flows from operation. Besides, earnings have incremental information content beyond cash flows from operation. Accruals have incremental information content beyond cash flows from operation too. When we separated accruals to discretionary and nondiscretionary parts, these results were approved. Moreover, the results show that discretionary accruals have incremental information content beyond nondiscretionary accruals.

The objective of this article is to investigate the usefulness of the four fundamental independent variables - shareholders' equity, stock price, dividends, and operating earnings - on the annual operating earnings growth rate (the dependent variable). The relevant data was collected for a five-year-period (1387-1382). To study the significance correlation, two relevant statistical models namely Multivariable Regression and Panel Data were employed. The hypothesis test result showed a significant correlation between the variables, with the exception of dividends.

This paper reexamines the Dechow & Dechev (2002) in Tehran Stock Exchange. There are different criteria for assessing the quality of accruals and earnings. Two vies are suggested for the role of accruals. By adjusting the recognition of cash flows over time. We can better measure firm performance, but another view is that because of using assumptions and estimates of future cash flows the quality of accruals is affected. We collected data of 96 firms for 1377 to 1383 and used pooling regression. We show that (1) there is significant relationship between changes in working capital and cash flows, (2) only changes in working capital (as one of the specific characteristics of the firms like size, sales, operating cycle and vice versa) can be used for assessing earning and (3) there is significant relationship between the earnings quality criteria and earnings persistence.

Under conditions that two-digit inflation rate in Iran creates ambiguity regarding the utility of financial reports that are not adjusted for inflation, income manipulation and smoothing can add more questions about the usefulness of such reports. In this research, income smoothing in listed companies in Tehran Stock Exchange utilizing Iranian Accounting Standard Number 15 (accounting for investments) was investigated. This standard which authorizes use of "market" or "lower of cost or net sales price" for investing in trading securities logically seems like a tool for income smoothing and income manipulation.Performed statistical tests on listed companies in Tehran Stock Exchange for the years 1380 to 1382 indicates that although these tools have not been used extensively, but income smoothing is observed in companies that had non-zero gains resulting from sale of their investments.