Classification Shifting announced as new tools for earning management and become new subject for accounting research. In this article, we explore how Classification Shifting must measure and probe position of this tools in listed companies at Iranian stock exchange. For this purpose we gather data for firms from 2002 to 2014. Research results show that companies used Classification Shifting as a tools for managing earning. Also, research explore that this tools use in trade off position from other common earning management tools. In fact firms used in order real management, accrual management and lastly Classification Shifting. In addition, results show that financial crisis is important factor for using this tools.

Classification Shifting of earnings statement items as a tool for (operational) earnings management has been investigated in recent studies. The purpose of this paper is to investigate the behavior of Classification Shifting in earnings statement as a tool for earnings management and the effect of the CEO's tenure on this behavior. Statistical analysis has been conduct using sample data consisting of 136 companies accepted to the Tehran Stock Exchange in the period from 2014 to 2022. In order to investigate the behavior of Classification Shifting in earnings statement items, the McVay (2006) approach was used, and regression models with the generalized least squares estimation method were used to test the hypotheses. The results confirm the use of Classification Shifting in earnings statement items for managing operational earnings. Also, the findings indicate the existence of a significant negative relationship between the tenure of the CEO and the Classification Shifting, in other words, with the increase of the CEO tenure, the behavior of Classification Shifting decreases; but this effect in the early years of the CEO's tenure is not different compared to other years of the tenure. The results of this study add to the literature of earnings management and provide guidelines for financial analysts, investors and board members of companies. The research evidence deepens the understanding of CEOs' job concerns and the mechanism of managers' reputation and helps to understand the motivations for Classification Shifting.

Objective In recent years, accounting researchers have primarily focused on the management of discretionary accruals and the manipulation of real business activities, paying less attention to earnings management through Classification Shifting of income statement items. Although the topic of earnings management through Classification Shifting has recently gained attention from researchers, and some domestic studies have addressed it, there is limited empirical evidence on how Classification Shifting can be influenced by managerial beliefs. Therefore, this study aims to investigate the relationship between managers' overconfidence and Classification Shifting and examine the moderating role of managerial ability in this relationship. Methods To test the research hypotheses, data from 138 firms listed on the Tehran Stock Exchange over the period 2012–2023 (1,656 firm-years) were utilized. The Generalized Least Squares (GLS) method was applied for model estimation, with controls for both year and industry fixed effects. To address potential issues of heteroscedasticity and autocorrelation in the errors, cluster-robust standard errors at the firm level were employed. The models for measuring unexpected core earnings and unexpected changes in core earnings were estimated cross-sectionally at the industry level (120 industry-years).     Results The research results indicate that a reduction in non-core earnings leads to an increase in unexpected core earnings and a decrease in unexpected changes in core earnings. These findings suggest the prevalence of the Classification Shifting phenomenon in Iranian firms. Additionally, the results show that managers' overconfidence strengthens the positive (negative) relationship between the reduction in non-core earnings and unexpected core earnings (unexpected changes in core earnings). With an increase in managerial ability, the impact of managers' overconfidence on the relationship between the reduction in non-core earnings and the two variables of unexpected core earnings and unexpected changes in core earnings diminishes. Furthermore, the results are not sensitive to the use of an alternative definition for measuring managers' overconfidence. Conclusion Based on the research results, it can be concluded that an increase in managers' overconfidence intensifies earnings management through Classification Shifting of income statement items. Overconfident managers have an exaggerated trust in their own abilities, and therefore, they intentionally classify some core expenses as non-core expenses to report higher core earnings than actual. This behavior not only skews the true financial performance of the firm but also misleads stakeholders relying on these statements. Furthermore, the research findings indicate that as managerial ability increases, the impact of managers' overconfidence on Classification Shifting diminishes. Compared to overconfident managers with weak managerial ability, overconfident managers with higher abilities have a more realistic assessment of their capabilities and sufficient capacity to meet their forecasts about the firm, thus having less motivation and need to reclassify income statement items. This suggests that improved managerial skills can mitigate the negative effects of overconfidence, ensuring more accurate and reliable financial reporting.

Objective: Previous research on earnings management has focused mostly on accruals earnings management methods and real earnings management. Recently, a third tool called Classification Shifting for earnings management has been considered. Classification Shifting occurs when management intentionally misclassifies parts of recurring operational expenses as incomedecreasing special items (McVay, 2006). This can inflate core earnings; for example, by hiding parts of the recurring administrative expenses among none operational items. Income Shifting within the income statement does not change bottom-line income but does increase perceived core earnings, an alternative performance measure often emphasized by financial analysts and investors. results of previous studies like McVay (2006) provide evidence of higher levels of Classification Shifting when management has incentives to act opportunistically to meet or beat consensus analysts' earnings forecasts. Different studies (MacVay, 2006; Saghafi and Jamalian, 2018) documented evidence of using Classification Shifting as a method of earnings management by the managers in different markets. Some other studies report that a strong investor protection environment and strong internal corporate governance tend to mitigate Classification Shifting (Behn, Gotti, Herrmann, & Kang, 2013; Zlata & Roberts, 2016). Also, the role of ownership structure, which is argued to have a significant impact on earnings management, should not be neglected. The value of a strong board and audit committee arises, in part, because they constitute a form of monitoring, curbing opportunistic managerial behavior, and therefore reducing information risk (Zlata & Roberts, 2016). Although there is general agreement that strong boards and audit committees curb accrual-based earnings management. In addition, due to the importance of the supervisory role of the board of directors in the company and its impact on the efficiency of supervisory mechanisms in the present study, some characteristics of the board of directors like board size and proportion of independent directors are also considered. Therefore, this study aims to investigate the effect of board characteristics on the relationship between ownership structure and Classification Shifting. This study investigated the role of board size and independence in the relationship between ownership structure and Classification Shifting. Method: The present sample of the present study includes 105 companies listed on the Tehran Stock Exchange from the period 2016 to 2020. In order to test the research hypotheses, multiple regression analyses have been used. Based on theoretical foundations these hypotheses were developed and tested: H1: there is a relationship between intuitional ownership and Classification Shifting. H2: there is a relationship between state ownership and Classification Shifting. H3: board size has a significant effect on the strength of the relationship between intuitional ownership and Classification Shifting. H4: proportion of independent directors has a significant effect on the strength of the relationship between intuitional ownership and Classification Shifting. H5: board size has a significant effect on the strength of the relationship between state ownership and Classification Shifting. H6: proportion of independent directors has a significant effect on the strength of the relationship between state ownership and Classification Shifting. In order to measure Classification Shifting, residuals from the model developed by McVay (2006) were used. This model measures Classification Shifting between core expenses (cost of goods sold and selling, general, and administrative expenses) and special items. Results: The results show that there is a negative and significant relationship between institutional shareholders and Classification Shifting and the size of the board strengthens this relationship. But the effect of the proportion of independent directors on the relationship was not significant. There is also a positive and significant relationship between state ownership and Classification Shifting. While the proportion of independent directors weakens this relationship, the size of the board of directors does not affect the relationship. Conclusion: The results of this study show that the ownership structure of companies affects the rate of application Classification Shifting as a method of earnings management. Different kinds of ownership structures can change manager motivations to apply Classification Shifting. Since institutional ownership provides professional monitoring and control of manager behavior, it has been proven to be an effective corporate governance mechanism. In line with this theoretical foundation, we find a negative relationship between institutional shareholders and Classification Shifting. On the other side, a positive relationship between state ownership and Classification Shifting was expected as a result of poor monitoring mechanisms applied by the states to control managers’ behavior. Different aspects of corporate governance such as the board size and independence also can affect these relationships. The findings of the present study should be considered in the decisions of investors and stakeholders of the company because it can provide new evidence on how to use the change in Classification as a new way of earnings management. This finding also can be used by auditors for audit risk assessment and audit planning. Since the evaluation of the Classification Shifting as a method of earnings management is widely ignored by researchers, there are many possible avenues for future research. The effect of other mechanisms of corporate governance on the Classification Shifting can be studied and on the other hand effect of Classification Shifting on the value relevance of financial statements the and reaction of investors to financial statements can be investigated.

Objective: Since the advent of accounting scandals in the early 21st century, the importance of cash flow statements has increased significantly. Among cash flow statement items, for users of financial information, cash flow operating is important. In recent years, researchers have paid attention to the issue of Classification Shifting in the items among financial statements and especially the items Classification Shifting in the statement of profit or loss. However, research on Classification Shifting in the case of cash flows is relatively rare. Classification Shifting is a method that managers can use to change cash flows. In the Classification Shifting, managers can change the figures among the different classes of financial statements. Classification Shifting can occur between the profit and loss statement or the cash flow statement. One of the concerns that arises especially during the initial public offering and challenges investors with it, the issue is whether the cash flow is positive before the public offering. Information asymmetry between participants in the initial public offering process causes that possible the directors of these companies to have the incentive and opportunity to manipulate the cash flow of operations in the pre-offering period; to show that the cash flow of their operating activities is positive. One of the methods that managers can use to improve their operating cash flow without affecting the net cash flow; The movement of figures between classes is a form of cash flow; Therefore, the purpose of this study is to investigate the Classification Shifting of cash flows among the cash flow statement. Methods: To measure cash flows Classification Shifting, Negar and Sen (2016) model and using variables based on signs of cash flows )and then net cash flow of investment and financing activities as alternative variables( have been used. First, the five-tier cash flow statement based on Iranian Standard No. 2 was changed into a three-tier one based on the Financial Accounting Standards Board (FASB). Then, using the data of companies that have been going public before the research period, Dichow et al. (1998) model was cross-sectionally fitted in the year-industry level and its coefficients were extracted. In the next stage, based on various criteria, a statistical sample including 70 companies with an initial public offering listed on the Tehran Stock Exchange, in the period 2004 to 2019 was selected. Eventually; the test of research hypotheses for this sample using multiple regression is based on cross-sectional data model. Results: The results on the variables based on signs of cash flow outflows of investment and financing activities show that cash flow outflows of investment activities as well as cash flow outflows of financing activities have a significant positive relationship with unexpected operating cash flow. The results on the variables based on signs of cash flow from investment activities and financing showed that the cash flow of investment activities has a significant negative relationship with the flow of unexpected operating cash. However, the cash flow from financing activities has no significant relationship with unexpected operating cash flow. Also, the results of appling the variables of net cash flows from investment and financing activities indicate that there is a significant negative relationship between net financing cash flow and unexpected operating cash flow; But net investment cash flow has no significant relationship with unexpected operating cash flow. Conclusion: Investors generally view operating cash flow as an important measure of operating performance that can have a important impact on their decisions. This variable becomes very important when companies do not have trading history and public release of their financial statements before offering. Given the information asymmetry that exists between participants in public offerings, it is important for investors that these companies did not transfer cash flows between different classes of cash flow in the year before the launch. Research findings indicate that these companies, in the year before offering to the public, part of the operating cash outflows are transferred to the investment or financing cash outflows and part of the investment cash inflows are transferred to the operating cash inflows. In general, the findings support the involvement of companies with an initial public offering in the cash flow Classification Shifting in the year before the offering. The findings of this research can be effective in the decision making of investors who intend to buy the shares of these companies. Therefore, users of financial information as potential investors, lender, and analysis should consider the effects of cash flow Classification Shifting the year before the initial public offering in their decision-making when buying public offering shares.

The two approaches are more prominent in the accounting literature, accrual-based earnings management and manipulating the actual activities however, the present study is considered the third type of earnings management model, namely a Classification Shifting. The purpose of this study is to investigate the effect of constraints on earnings management strategies on the application of Shifting strategy in earnings Classification in the Iranian capital market. The research sample consisted of 114 firms from 2013 to 2021 (1026 observation). Logistic regression models have been used to test research hypothesis. The results of the study show that financial health, institutional shareholders, audit firm size and market share have a negative and significant effect on the Classification Shifting. Also, the operating cycle has a positive and significant effect on the c Classification Shifting,and its tenure does not have a significant effect on the Classification Shifting. Additional tests indicated large companies have a greater incentive to do Classification Shifting (a form of earnings management) compared to small companies, because they have greater political costs.

Management manipulations are always one of the important areas of accounting literature. Managers have tools at their disposal, through which they can manipulate the earning and revenue of the firm under their management. One of these tools is Classification Shifting. The purpose of this study is to investigate the profit and loss items Classification Shifting in firms with initial public offerings on the Tehran Stock Exchange according to their age and size. For this purpose, a sample consisting of 70 initial public offerings during the years 2004 to 2019 was examined using multiple regression and cross-sectional model. The findings of the research show that in small firms (also young firms) there is a positive relationship between non-operating expenses and unexpected operating Earnings in the year before the launch, and there is a negative relationship with changes in it; But in big firms (also old firms), the relationship between non-operating revenue and expected operating revenue and changes in it is not significant. The findings of the research support the involvement of small firms (also young firms) Classification Shifting of expenses, by transfer operational expenses to non-operational expenses, in the year before the IPO; but there was no evidence indicating the involvement of big firms (also old firms) in Classification Shifting of revenues, by transfer non-operational revenues to operational revenues. The findings of this research can be effective in the decision making of investors, lenders, and analysts.

Public accountability is a sign of modern and democratic administration. Accountability has become a topic of concern in governance literature. The question of holding politicians and administration accountable in new governance environment, where many traditional means for controlling government have been no longer fully applied, has gained wide recognition. As a consequence, new types of accountability have been sought and identified. The article discusses the Shifting conceptualization of accountability on the basis of Erkkila typology in light of changes in the patterns of administration (governance) in the literature of public administration.It argues that this shift can be related to the structural changes that have taken place in politics and public administrations from the late 1980s to the present. Also, the argument is made that instead of trying to identify new mechanisms of accountability, more attention should be paid to the transformations taking place among traditional mechanisms of accountability and their potentials in the new institutional design. This article attempts to examine this shift through using descriptive-analytical method and deductive reasoning.