With regard to managers’ important roles in success of companies, the main purpose of this study is to examine the effects of managerial ability on the bankruptcy risk of the Iranian firms listed in the Tehran Stock Exchange, (TSE), and the mediating role of financial performance in that risk. In this study, the data came from a sample of 103 non-financing companies in the TSE from 2004 to 2015. managerial ability of the companies was measured by the Demirjian’ s model (2012). Moreover, the rate of return on assets was applied as a proxy of financial performance, and Emerging Market Scoring model (Altman's Z˝ score) was used as a measure of bankruptcy risk. The results showed that managerial ability has negative impact on bankruptcy risk. And, financial performance mediates the effect of managerial ability on bankruptcy risk. In other words, managerial ability reduces the bankruptcy risk through improving financial performance. Therefore, it could be concluded that managerial ability is an important factor in the success of the companies in TSE.

Objective: There are two views regarding income management. The first view aligns with good income management, whose arguments are based on blocked communication. According to this concept, managers have much information related to the company due to their expertise, but providing information directly to the public is very expensive. This prevents the direct presentation of information. In this view, income smoothing as one of the income management models can help the manager indirectly provide confidential information to users and reduce information asymmetry. However, the opposite point of view, whose arguments indicate bad income management, shows that managers use income smoothing for their personal interests, which aligns with opportunism. Managers with a high level of proficiency in improving company performance are typically expected to utilize smoothing to minimize information asymmetry. On the other hand, even managers with a lower level of ability in company performance may opt to employ smoothing techniques due to the required skill set and the potential negative consequences associated with poor smoothing decisions, such as financial abuses, damage to reputation, and job loss. Therefore, high-ability managers are generally expected to use their authority more effectively to disclose hidden information through smoothing techniques than their low-ability counterparts.Based on signaling theory and prior research on income smoothing and managerial ability, it is hypothesized that there is a relationship between managerial ability and income smoothing. Furthermore, it is expected that income smoothing, when associated with managerial ability, can enhance the informational value of income. Capable managers are expected to use income smoothing as a tool to communicate information to the market compared to weak managers; for this reason, they use more income smoothing, which leads to an increase in the informational content of income. Specifically, this study examines whether high-ability managers use income smoothing more than low-ability managers. It also examines whether smoothing by higher-ability managers increases the information of current earnings about future performance compared to earnings smoothing by lower-ability managers. Method: The current research is applied in terms of purpose. Following the previous studies, ordinary least square regression correlation analysis was used to test the research hypotheses. The sample for this study comprises 791 firm-year observations from companies listed on the Tehran Stock Exchange from 2012 to 2018. Results: Evidence shows that managerial ability has a positive relationship with earnings smoothing, and managers with high ability provide more forward-looking information through earnings smoothing, thereby increasing the information content of earnings about future performance. Indeed, smoothing by high-ability managers increases the ability of current earnings to predict future cash flows. In contrast, smoothing by managers with low ability reduces the ability of current earnings to predict future cash flows. This conflicting effect of smoothing by low-ability managers and reducing the informational content of earnings highlights the importance of considering management's ability to evaluate the usefulness of earnings smoothing. In the study, a common factor was used for smoothing at the company level based on three smoothing methods: (1) the standard deviation of income divided by the standard deviation of operating cash flows; (2) the relationship between changes in accruals and changes in operating cash flows and (3) the correlation between changes in discretionary accruals and changes in earnings before management. MAScore has been used to measure managerial ability; MAScore is a measure of management team ability derived from data envelop analysis (DEA). Conclusion: Managers' ability can be considered one of the main factors in using income smoothing to communicate company information to the market. Capable managers use income smoothing to reduce information asymmetry and indirectly signal to the market. managerial ability can be defined as the performance efficiency of managers compared to competitors in using the company's resources to create more Income. Evidence shows that capable managers use more income smoothing. Also, the evidence shows that capable managers use income smoothing to disclose the company's secret information to the market to reduce information asymmetry and indirectly signal to the market. High-ability managers have superior skills in evaluating the future performance of the firms under their management, so their smoothing of earnings increases the information content of earnings. High-ability managers smooth earnings to disclose information in current earnings. Therefore, they improve the information content of Incomes about future performance. These findings are consistent with the view that high-ability managers use their superior skills to predict their firms' economic prospects and use smoothing to transmit tacit information to the market. The results of this research can be useful for understanding the factors and benefits of income smoothing.

Internal control quality of a firm can be affected by its specific features, auditing quality and corporate surveillance. Establishing an appropriate internal control system in firms will enhance accountability and financial transparency. This study is aimed to investigate the effect of managerial ability on internal control quality. Thus, the study applies management compensation and managerial efficiency as indexes of managerial ability, and uses internal control system weaknesses in auditing report as an index of the internal control quality. This is an applied research with and causal method. The sample consists of 87 firms listed in Tehran Stock Exchange during the period from 2007 to 2016. To test the hypothesis the Logit regression method has been used considering the nature of the dependent variable. Results indicate that there is no significant relation between management compensation and internal control quality. Also, a negative relation between the managerial efficiency and the internal control system weaknesses indicates that managerial ability can improve the internal control system.

Management by tax avoidance may follow appropriate reporting that presents the firm with more profit than reality, and to show a good delineation of firm proceeds. However, able managers are less involved in tax avoidance action because of its opportunity cost. The aim of this study is examining the effects of management ability on tax avoidance. A sample of 91 firms accepted in the Tehran Stock Exchange from 1384 to 1392 was selected.In this study management ability criterion was considered a part of firm efficiency which was not affected by inherent factors, and was calculated by data envelopment analysis method. Also, the average of cash payment in the next three years divided to the average of taxes in the same period was regarded as tax avoidance criterion. Finally, test of hypothesis was carried on by synthetic regression. The result showed that management ability has significant negative relationship with tax avoidance.

Purpose: managerial ability goes beyond the corporate economical characteristics, and hence exerts considerable effect on financial reporting transparency and information environment quality. The purpose of this study is to analyze whether managerial ability influences corporate information environment quality. Methods: In this study, the model developed by Damirjan et al. (2012) is employed to measure managerial ability, and the model designed by Fakhari and Rezaei Pitenoei (2017) is also adopted to measure corporate information environment quality. The research hypothesis is built on a sample of 485 firmyear listed on the Tehran Stock Exchange during the years 2013-2017 and then tested using multivariate regression model using panel data. Results: Following signaling theory, the results reveal that managerial ability improves corporate information environment quality. Also, the results of the sensitivity test indicate that the substitution of an alternative measure for managerial ability and information environment quality does not influence the major results, thereby confirming the robustness of the results. Conclusion: More able managers have better performance due to their greater awareness of their business, industry, and business environment, and are more likely to be interested in communicating their superior performance through more transparency in corporate financial reporting and information environments. Contribution: The findings of this study not only fill the gap in the field, but also help managers, investoes and capital market regulators make informed decisions.

This paper investigates the relationship between trust and managerial ability. We use Audi’, s (2016) Trust measure based on textual analysis. Also we use demerjian’, s(2012) model to examine managerial ability. The result of our main regressions indicates a positive relation between current level of trust and managerial ability, while current managerial ability is associated with trust too. Also, our results show that managerial ability effect on trust is much stronger than trust effect on managerial ability.

This study is aimed to investigate the effects of managerial ability on the investment efficiency and also examine the effect of financial reporting quality on the extent of managerial ability effectiveness on the investment efficiency of firms listed in Tehran Stock Exchange (TSE). Investment efficiency in a conceptual framework means the acceptance of the investment projects with positive NPV, and investment inefficiency means rejecting these investments opportunities (underinvestment) or investing in projects with negative NPV (overinvestment). Overinvestment and underinvestment are signs of investment inefficiency. Chen (2011) modeling, Demerjian et al (2011) modeling and Kothari (2005) accruals quality modeling have been used for evaluating the investment efficiency, managerial ability and financial reporting quality respectively. The systematic elimination method was used for sampling 119 firms listed in Tehran Stock Exchange during the years 2008 to 2014, and the model of panel data was applied to test hypotheses. The results indicate that managers with more ability are more willing to do overinvestment. Also, the results show that the financial reporting quality decreases the managerial ability effectiveness on overinvestment.

Objective: Manager's efficiency in using corporate resources is reflected in the information presented in the financial statements. Manager's ability can reduce fraudulent financial reporting by fulfilling stakeholders expectations and improving firm's performance. On the other hand, political connections not only affect firms financial situation, but also it can affect manager's incentives and abilities in preparation of the financial statement and lead to significant difference in the quality of financial reporting. Thus, the purpose of the present research is to examine the association between managerial ability and fraudulent financial reporting, and also to investigate the moderating effect of political connections on this relationship. Methods: To achieve the study objectives, 129 firms listed in the Tehran Stock Exchange were selected and studied for the period of 2011 to 2017. A panel data approach was used to test the hypotheses of research. Results: Research’ s findings show that there is a negative and significant association between managerial ability and the fraudulent financial reporting. In addition, the findings show that firms' political connections with the government do not weaken or limit the impact of managerial ability to reduce fraud in financial reporting. Conclusion: The results show that more able managers are knowledgeable about their business and can therefore make effective judgments and estimates, they can better transform firm resources and achieve better business performance and thus reduce fraud in financial reporting. In addition, the results show that the effectiveness of managerial ability to reduce financial reporting fraud is not affected by the firms' political connections with the government.

Top executives are expected to have a better understanding of their business because of access to the company 's insider and confidential information, which will enable them to make better estimates and judgments. The main topic of this research is to examine the effect of managerial ability on fraudulent financial reporting. The role of political connections on the impact of managerial ability on fraudulent financial reporting was also examined. For this purpose, an example of 95 companies of listed companies in Tehran Stock Exchange during the period of 2009 to 2018 was investigated. The present research is descriptive from the point of view of purposefulness, quantitative from the strategic point of view, empirical from the perspective of approach and from the perspective of solution, field and library. To test the hypotheses, logistic regression is used. The results of the tests show that the relationship between managerial capability and fraudulent financial reporting is reversed. Also، political connections failed to significantly affect the relationship between managerial ability and fraudulent financial reporting.

Objective: Irregular and un-persistent dividends payments can provide a risky image of a firm and increase the costs of financing from the capital markets. This paper is aimed to examine the relationship between managerial ability and dividends smoothing. Methods: Using data from 148 firms listed in Tehran Stock Exchange during 2007-2017 and applying dynamic panel data approach, this research compares the dividends smoothing in firms with high and low managerial ability. Results: The research results show that compared with other firms, firms with a higher level of managerial ability have a lower degree of dividends smoothing. The complementary results using differenced generalized method of moments are consistent with the research main findings. Conclusion: Our findings confirm that the more capable managers have the lower tendency to smooth firms’ dividend. These findings are not consistent with the concepts presented in the signaling theory. Contribution: For the first time, this research compares the dividends smoothing in firms with high and low managerial ability, and from this perspective tests the signaling theory. The research findings can help to develop the dividends literature and related theories.