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مرکز اطلاعات علمی SID1
مرکز اطلاعات علمی SID
مرکز اطلاعات علمی SID
مرکز اطلاعات علمی SID
مرکز اطلاعات علمی SID
مرکز اطلاعات علمی SID
مرکز اطلاعات علمی SID
Issue Info: 
  • Year: 

    2010
  • Volume: 

    2
  • Issue: 

    1 (58/3)
  • Start Page: 

    1
  • End Page: 

    37
Measures: 
  • Citations: 

    0
  • Views: 

    668
  • Downloads: 

    188
Abstract: 

Introduction: Development of capital markets in Islamic countries, like other countries around the globe, is one of the essential targets of governments. As a result, most researchers and theorists in these countries have attempted to structure a suitable dynamic Islamic Capital Market, in which the characteristics and implement of financial tools and activities are Islamic Economic Rules-- Shari’a compliance. Because of special and strong religious rules for financial and monetary transactions in Islam-- like prohibition of Reba, there have been several researches to set particular standards or develop an efficient model for corporate reporting in Islamic business environments. The results of many studies in accounting theory, wholly and strongly endorse that “Accounting” is a branch of social sciences and there are many evidences on influences of environmental and social factors on accounting methods and financial reporting process and products. Studies of relationships between accounting and social factors, in one hand take the cultural and other environmental factors as the most powerful factors in shaping and preparing corporate reports (Hafsted & Gray, 2001), and on the other hand, consider accounting as a product of its environment itself and so, a country’s accounting system may be significantly influenced by a variety of environmental factors (Maliah Sulaiman, 2005). As such, factors like political and legal policies, structure of ownership rights, size and complexity of business environment, process of finance and taxation, economic growth rate, technology and even education system may run the shape and approaches of accounting system in a society and any change in one of those factors may cause a change in accounting policies or methods. In any case, this fact will shape some particular characteristic for financial reports as the final product of accounting process. In better words, each particular business environment necessitates its own corporate reporting model which may be wholly or partially different than others. Based on abovementioned thought, we can find sets of studies and researches in recent years which have set to survey the role of religious values and believes of Muslim economic activists in designing accounting system and preparing financial statements. The core of those values and believes is Shari’a that mainly regulates the economic decisions and behaviour of Muslims in both individual and social aspect of their life. And so, regulated economic behaviour obviously needs to a particularly regulated accounting system. For this purpose, we should identify the key factors which make accounting system of Islamic countries distinguished among regular international one. Since, all of evidences which have resulted by several researches in capital market field show the strong effect of information on securities price, and financial reports are the most efficient tools to report such information, studies about the roles and characteristics of corporate reports in Islamic Capital markets and differences whit Non-Islamic ones, have a huge importance in Islamic academic and professional researches. On the other hand, Islam is not a religion which restricted only to personal aspects of individual, and so, because of social focus of this religion, there are so many rules which are set on social, economic and cultural aspects of life. Therefore, compliance with these rules is a vital issue in designing accounting system and financial reports. In other words, because accounting is a social science which is affected by environmental factors, it is obvious hat financial reports as the final products of accounting process should meet environmental needs as well. Accounting has been identified from two views: the information system for making economic decisions and a perfect tool for accountability (Ijiri, 1984). Since the importance of accountability aspect of corporate reports in Islam is not less than first one, and even it is much more, we do need to a model of financial statements which can be considered as a strong tool to meet accountability necessities very well, a model which has to be applicable and practical, of course. In addition, Shari’a compliance corporate reports necessitates certain level of transparency and also fair focus on profit which cannot be predetermined or fixed and must be measured with enough reality and fairness in its distribution. Research Main Questions and Hypotheses: There are two main unanswered questions that this research has been designed to find suitable answers for them: 1) Do current conventional financial statements meet the Islamic Capital Markets needs? 2) What is the suitable Model of Financial Reporting in Islamic Capital Markets? Since the potential answers for these extremely important questions could be sufficient to meet the research's needs, we preferred to relinquish setting particular hypothesis. So the main aim this research is just finding two persuasive answers, which has been developed in the rest of text. Research Method: This paper is the brief of a thesis which had planned to introduce a suitable model for corporate reporting in Islamic capital markets. In order to achieve the targets we planned the study in three steps: first step was studying several theoretical text and conceptual frameworks about Islamic Economic System, Islamic Finance, Financial Reporting and other related topics which were useful to get a clear idea about the subject of research. One of main sources in this step is Ownership Equity Theories in accounting literature which plays a significant role in standard setting for corporate reports. In this stage we could identify the aimed factors which should be examined and applied in purposed model. In second stage, we surveyed the opinion of professionals, academic experts and well- experienced investors in capital market by Delphi method to get a consensus of opinions about factors. Finally, we attempted to design a proper model for financial reporting which can meet the major necessities of Islamic capital market concluded from first and second phases of research. This model has been prepared by combination of traditional and desired essential statements which focuses on activities of enterprise- and not on enterprise itself. In order to prepare a useful statements which could play a significant role for Iranian investors and financial analysts, our basic data has collected from one of the largest listed companies in Tehran Stock Exchange, a conglomerate whose activities are in five major fields, and each filed has its own identifiable characteristic, both in nature and profitability. In other words, this paper is summary of a research which has been planned to introduce a financial reporting model to meet Islamic Capital Markets needs. Results: The research evidences show that in Islamic Economy, two main aspects of financial reporting should be considered: first, transparency and accountability of corporate reports, and then, measurement of real profit and fairness in distribution of real profit, so the proposed model has to meet these factors. Since one of key theories which affect the standards and forms of corporate reports is ownership theories, the research shows that implement of Fund Theory can make model designing process much easier and more efficient. Finally, we have introduced a financial reporting model, in which the central point of reports focus is activities of business, and not entity or owners wealth which are central points in Entity and Proprietary Theory. Discussion and Conclusion: There are many evidences on influences of environmental and social factors on accounting, -as a social science, methods and financial reporting process and products. Since one of the strongest social factors is the religion of majority in each society, this paper is seeking a suitable model of Corporate Reports for Islamic Capital Markets. Several studies and accounting literatures show that the ownership theories have significant roles in standard setting for context and forms of financial report, and so we have tried to find the most suitable ownership theory to meet abovementioned need. The result of study shows that Fund Theory in accounting which is an operational based theory can be used to identify the form and context of Islamic Corporate Reports. Finally, based on Fund Theory and using Delphi Method in our research, we have prepared the proposed model for appropriate financial statements in Islamic capital Markets.

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Issue Info: 
  • Year: 

    2010
  • Volume: 

    2
  • Issue: 

    1 (58/3)
  • Start Page: 

    154
  • End Page: 

    121
Measures: 
  • Citations: 

    3
  • Views: 

    453
  • Downloads: 

    140
Abstract: 

Introduction Due to rapid changes in innovations and inventions in the world, a country can claim it has a safe and healthy economy which has a sufficient capital market and financial sector. In many countries, stock exchange market is the central core of capital market; one of the important subjects which is in the center of attention for investors in this market is how they can choose stocks and find appropriate time for selling and purchasing. In this regard there are several methods. One of the techniques of choosing stock is technical analysis. Technical Analysis is based on the amount of supply and demand. Technicians forecast the future trend of stock prices by using different graphs, historical prices and transaction volume of stocks. Forecasting in technical analysis does not mean obtaining an exact graph of future; it means finding the appropriate time for entering the market or departure, so that the return of selling and purchasing stocks in stock exchange market by using forecasting signals of technical analysis will significantly be better than return of selling and purchasing in this market without using forecasting signals of technical analysis. One of the most important instruments of technical analysis is moving average. In this paper, we investigate the efficiency of using technical analysis (moving average) in Tehran Stock Exchange Market, in three levels of total index, different industries and firm's index. Hypothesis: In this survey, we use two line techniques or simultaneous use of 10 days and 20 days Moving Average, as a pattern in technical analysis, for finding and testing the selling and buying signals. The hypotheses of the survey are:1. When we use the forecasting signals of technical analysis on the broad indices level, the rate of return on trading in Tehran Stock Exchange is significantly higher than when we do not use these techniques. 2. When we use the forecasting signals of technical analysis on industries level, the rate of return on trading in Tehran Stock Exchange is significantly higher than when we do not use these techniques. 3. When we use the forecasting signals of technical analysis on industries level, the rate of return on trading in Tehran Stock Exchange is significantly higher than when we do not use these techniques. 4. When we use the forecasting signals of technical analysis on the broad indices (T) level, the rate of return on trading in Tehran Stock Exchange is significantly higher than the rate of return when we do not use these techniques on the industry (i). 5. When we use the forecasting signals of technical analysis on the industry (i), the rate of return on trading in Tehran Stock Exchange is significantly higher than the rate of return when we do not use these techniques on the industry (j). Methods: In this research, the beneficial use of 10 days and 20 days moving average predictor signals, the index of‍ technical analysis and type of delay time index have been studied. Moving average rule, divided the total amount of the samples into two groups (related period‍ to buying and selling symptoms) divided‍, depending on what the moving average‍ yields. If the short term moving average is higher than long term moving average‍, this is a buy signal and if the short term moving average ‍is ‍lower than long term moving average‍, this is a sales signal. Investors buy‍ when the short term moving average moves ‍from below into the long term moving average, and stop acting in market ‍until the short term moving average‍ moves from up into long term moving average. Return or profit for each buy or maintenance strategy signal and any sale or not holding strategy signal, has been calculated. Then returns from the use of technical analysis and return from not using this method are compared. Therefore, the principal aim of this study is comparing returns ‍from shares ownership and lack of shares ownership when 10 day and 20 days moving average predictor signals have buy and sales suggestions with similar value obtained using buy, maintenance, or not to use of 10-days and 20 days moving average predictor signals. Results: In this study, it was observed that the use of 10 days and 20 days moving average predictor signals in Tehran Stock Exchange has acceptable performance in Tehran Stock Exchange broad indices level, industries and firms, so using technical analysis in Tehran Stock Exchange Market has acceptable significance in all levels. The results also identified that use of 10 days and 20 days moving average predictor signals has higher efficiency than not using this method, and efficiency of using 10 days and 20 days moving average predictor signals in Tehran Stock Exchange board indices level has higher efficiency and more significance than using technical analysis in groups (various industries) level. Also efficiency of using 10 days and 20 days moving average predictor signals in groups level is higher than efficiency of using technical analysis in the firms level and has more significant. Discussion and Conclusion: We conclude that by using forecasting signals of technical analysis, we can have an appropriate return from an insufficient capital market. In this study, for first time ‍Stock price data of Iran exchange were used to investigate the efficiency of using Technical analysis (10 days and 20 days moving average) in Tehran Stock Exchange, in three levels of total index, groups ‍and firms‍; It was observed that using Technical analysis‍ in Tehran Stock Exchange, at all levels, has higher efficiency than not using this method‍, and efficiency of using Technical analysis in Tehran Stock Exchange in general index level is more appropriate and has ‍more significance than using ‍technical analysis in groups level. The efficiency of using Technical analysis in industries level is ‍higher and more significant ‍than using technical analysis in firms level.

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Issue Info: 
  • Year: 

    2010
  • Volume: 

    2
  • Issue: 

    1 (58/3)
  • Start Page: 

    155
  • End Page: 

    177
Measures: 
  • Citations: 

    1
  • Views: 

    983
  • Downloads: 

    213
Abstract: 

Introduction: In recent years, developed countries have witnessed the appearance and rapid evolution of the audit committee. The expansion of international activities, aggravation of activities of public companies for access to competitive merits, the increase in liabilities due to damages made to the environment, the role and effects of management estimations in figures reflected in financial statements and reports, the lack of a valid basis for external auditors to evaluate the claims made by management on the quality of internal control structures, the widespread use of computer systems and subsequently the complexities of supervising the systems' controls have resulted in an increase in the formation and utilization of audit committees. Nowadays, authentic management, control and the supervision of various issues of public companies have become major issues propounded in the economic systems of various countries across the world including Iran. Considering the changes that have been occurring in today's world, protection of the interests of investors as providers of capital and also the most significant users of accounting information and financial reports has become more important than ever. The establishment and expansion of audit committees is one of the strategies that is expected to be influential in the protection of interests of various groups of users of accounting information and financial reports. A number of companies in developed countries have nowadays established audit committees to take over the role of supervising accounting procedures and operations, and the financial reporting system of economic entities (Arbab Soleimani and Nafari, 2008). The role of the audit committee as an influential factor in increasing the utility of the presentation of financial reports shall continue and the effective audit committee shall play a part in filling the credit vacuum that is present in today's financial reports. Research Hypotheses Eight hypotheses have been formulated to examine the role played by the audit committee and obstacles that prevent its establishment and utilization in Iran, as follows:1- The audit committee helps maintain the relationship between the entity's board of directors and auditors. 2- The presence of an audit committee increases the independency of the external auditor with regards to the entity's board of directors. 3- The presence of an audit committee increases the efficiency and effectiveness of accounting and internal auditing units within each economic entity. 4- The authentic performance of the audit committee is a preventive factor for managers with regard to internal control systems and fraud. 5- The authentic performance of the audit committee improves the quality of financial reports. 6- Unfamiliarity with the audit committee and its influential role are among the factors for the avoidance of formation and utilization of audit committees in Iranian economic entities. 7- Tendencies of Iranian managers to centralize are also a factor in avoiding the formation and utilization of audit committees in Iranian economic entities. 8- The absence of Regulations requiring companies listed on Tehran Stock Exchange to establish an audit committee is again a factor for the non-establishment and utilization of audit committees in economic entities in Iran. Methods: Analysis of general and specialized information within the questionnaires was performed using descriptive statistical methods including frequency distributions, absolute distributions and arithmetic mean, and specialized information on the questionnaires were also analyzed using statistical inference including binomial tests, Chi square and one sample t tests within a 95% confidence interval. Research Results: Results of the research showed that:1- The presence of an audit committee helps maintain the relationship between an entity's board of directors and its auditors. 2- The presence of an audit committee increases the auditors' independency from the entity's board of directors. 3- Audit committees increase the efficiency and effectiveness of accounting and auditing units. 4- The presence of an audit committee results in the promotion of the following:Ensuring the establishment of an integral internal control system,Effectiveness and quality of internal control systemsSafeguarding assets of the economic entity Reducing chances of errors, irregularities, illegal actions, fraud, swindling, and violation of the internal control systems. Moreover the audit committee can prevent any optional change in accounting procedures by the entity's management. 5- The audit committee holds a crucial role in the following:Preparation and presentation, by the economic entity, of easy to understand information that responds to the needs of the users of financial reports. Discovery of significant financial errors and fraud Encouraging the board of directors to present integral financial reports and increasing the company's credit rating and reliability of its reports. 6- Unfamiliarity of the various groups of users of accounting information and financial reports, regulation bodies and professional authorities in accounting and auditing in Iran with the role played by the audit committee and the impact of investors' interests as capital providers are among the obstacles for its establishment and utilization in Iranian entities. 7- Tendencies of managers to centralization in Iran are another obstacle in the establishment and application of the audit committee in Iranian entities. 8- The other factor for non establishment and utilization of an audit committee would be the absence of any regulation requiring companies listed on Tehran Stock Exchange to hold such committees. Conclusion and Suggestions: Results indicate that the establishment and utilization of an audit committee is quite effective in the prevention of illegal actions, improvement of the financial reporting process and also the presentation of transparent and reliable information and financial reports. Moreover, the unfamiliarity of Iranian economic entities with these committees, the tendency of Iranian managers to centralize, and the absence of regulations by Tehran Stock Exchange are among the factors for non-establishment and utilization of audit committees in Iran. Since, according to research results the presence of an audit committee can have a very significant impact on the quality of financial reports, it is deemed necessary for other studies to be carried out on the necessity of establishing an audit committee in Iranian economic entities including the following subjects:1. An investigation of the influence of audit committee on the effectiveness and efficiency of the activities of operational auditors. 2. An investigation of the influence of audit committees on an entity's value. 3. An investigation of the influence of the audit committee on attracting foreign investors to invest in Iranian entities. 4. Examining the effects of the presence of an audit committee on the neutrality of the internal auditors.

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Issue Info: 
  • Year: 

    2010
  • Volume: 

    2
  • Issue: 

    1 (58/3)
  • Start Page: 

    179
  • End Page: 

    198
Measures: 
  • Citations: 

    0
  • Views: 

    335
  • Downloads: 

    130
Abstract: 

Introduction: The importance of measuring managers’ performance of one department or the whole firm has long; especially from 19th century, received the attention of accountants. Considering the set of modern economic and business conditions, the resultant changes in management new patterns and running organizations, the appearance of new notions and approaches of management control concept and the Agency theory and also the inefficiency of traditional assessment methods made the change and development in Criteria of performance measurement necessary. To do so, various Criteria and methods have been introduced and Tobin’s Q ratio is one of these Criteria. This ratio is the statistic which can be the indicator of firm’s value for investors and can respond to shareholders that to what extent the management involves in increasing their wealth. Research Question: Now the question is that does Tobin’s Q ratio as an assessing measure of performance show a better image of the future performance of admitted firms in Tehran Stock Exchange comparing to measures such as price-earnings ratio and price-book value ratio?Methods: To respond the above question, a 5-year period (2002-2006) was considered. All admitted companies in Tehran Security Market created the statistic society and by applying some limits, 141 qualified companies were finally chosen in this study. The assessing model used in this research is the model offered by Ohlson which is tested by Kolin et. al. Ohlson believes that for examining the final fluctuation of explaining extent of independent variables in the studied period, one should use regression method to fit models. Also Harney and Tower followed this assessing model in their research. So to test the proposed assumptions in this research, Pearson correlation coefficient, fitedd multiple regression, T statistic (or possible figures) were used. To analyze the data, SPSS software was used. Results: Referring to tests and statistical methods, one can claim that in the predicting process of equity return, Tobin's Q ratio has a higher predicting power than price-earnings ratio and price-book value ratio. Price-book value ratio is also in the second rank of this grade. The results derived from this research are similar to the results of Mr. Harney’s and Tower's research in 2003 and Mr. Smith’s and Wright’s in 2000. Conclusion and Suggestions: It is recommended to the dear investors in Tehran Stock Exchange not to rely only on firms stock price but also consider other assessing measures of performance in their decisions. Tobin's Q ratio as the assessing measure of performance, besides other measures, can be useful for investors to make a good decision.

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Issue Info: 
  • Year: 

    2010
  • Volume: 

    2
  • Issue: 

    1 (58/3)
  • Start Page: 

    199
  • End Page: 

    225
Measures: 
  • Citations: 

    0
  • Views: 

    1186
  • Downloads: 

    160
Abstract: 

Introduction The main purpose of this study is to determine the optimal model for the prediction of operating cash flows of companies listed in Tehran Stock Exchange. Investors, creditors and other users of accounting information need the cash flow information for decision making. A firm’s ability to generate cash flows affects the values of its securities. Operating cash flow is the principal and perpetual part of company’s cash flows. In the prior studies, different models have been tested to predict future cash flow from operation. The differences between these models are related to the use of different independent variables. Previous research on earnings and cash flows ability to predict future cash flows in Iran has examined only two or three models and some of them have examined those models at firm-level. This study examines six models to predict future cash flows. Firstly, research hypotheses have been tested for the all firms as a whole and secondly they have been tested for various industries. The results suggest that disaggregating earnings into cash and accrual components increases predictive ability of future cash flow. Also, the results imply that the cash flow prediction model that is based on disaggregating earnings into six cash and major accruals components, can predict operating cash flow better than other models. Research Hypothesis Given the purpose of this study, in this research, six following hypotheses are developed and tested by using data gathered from 73 Iranian companies listed in Tehran Stock Exchange (TSE) for the period 1997 to 2006:1. A significant relationship exists between “the historical operational earnings” and “future operational cash flows”. 2. A significant relationship exists between “the historical disaggregated operational earnings into cash and accruals components” and “future operational cash flows”. 3. A significant relationship exists between “the historical disaggregated operational earnings into cash and major accruals components (including operational cash flows, change in accounts receivable, change in inventories, change in accounts payable, depreciation and other accruals) ” and “future operational cash flows”. 4. A significant relationship exists between “the historical operational cash flows and Nondiscretionary accruals and “future operational cash flows”. 5. A significant relationship exists between “the historical operational cash flows and discretionary accruals” and “future operational cash flows”. 6. A significant relationship exists between “the historical operational cash flows and discretionary accruals and Nondiscretionary accruals” and “future operational cash flows”.Methods: Post event inquiry researches have been used in this study (using historical information). For statistical analysis and to test hypothesis, descriptive statistics (mean and standard deviation) and inferential statistics (correlation-test, single and multiple linear regression and analysis of variance) are used. The six following models are used to test six hypotheses: OCF i, t+1 =a+b ear EARN i, t +u i, t (1) OCF i, t+1 =a+b cf OCF i, t +b AACr ACCR i, t +u i, t (2) OCF i, t+1 =a+b cf OCF i, t +b AR DAR i, t +B INV DINV i, t +b AP DAP i, t +b DEP DEP i, t +b ot OTHERS i, t +u i, t (3) OCF i, t+1 =a+b CF OCF+b NDAC NDAC i, t +u i, t (4) OCF i, t+1 =a+b CF OCF+b DAC DAC i, t +u i, t (5) OCF i, t+1 =a+b CF OCF i, t +b NDAC NDAC i, t +b DAC DAC i, t +u i, t (6) Where:OCF=Operating Cash FlowsEARN=Operating EarningsACCR=Accruals DAR=Change in accounts receivableDINV=Change in inventories DAP=Change in accounts payableDEP=Depreciation OTHERS=Accruals – (DAR+DINV+DAP+DEP)Results: The results of statistical tests for the period 1997 to 2006 show that there is a meaningful relationship between independent variables and dependent variable in all hypotheses and all six models are able to predict future operational cash flows. Discussion and Conclusion: According to the results, we find disaggregating earnings into cash and accrual components increases predictive ability of future cash flow. Also, the results imply that the cash flow prediction model that is based on disaggregating earnings into six cash and major accruals components (model No.3), can predict operating cash flow better than other models. By testing the hypotheses in the industries-level, we find that ability of models in various industries is different. Our research provides evidence to confirm FASB’s stated objectives that information about earnings and its components is useful to predict future cash flows.

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Issue Info: 
  • Year: 

    2010
  • Volume: 

    2
  • Issue: 

    1 (58/3)
  • Start Page: 

    227
  • End Page: 

    249
Measures: 
  • Citations: 

    3
  • Views: 

    650
  • Downloads: 

    240
Abstract: 

Introduction: Institutional owners have influence on companies because of their substantial investments; and can affect on companies, policies (include accounting and financial reporting procedures). Financial statements are main core of financial reporting process. Financial statements (especially income statement) are attended by investors. This study is designed to provide insights into the monitoring role of institutional investors by examining whether institutional ownership affects the quality of reported earnings. There are two theories about institutional owners. Under active monitoring theory these owners have more incentives to become active monitors. Because of high costs, only large investors would have the incentive to engage in active monitoring. This class of thought believes that institutional investors have relative advantage in information collection and analysis compare with other small investors. Another theory is private benefits. It means that institutional investors may not actively monitor their investees’ management activities due to the presence of free riders and lack of their own sufficient experience; rather they may compromise with the investee managers. Therefore, institutional owners might not engage to encourage managers to report high quality earnings. This thought implies a negative relationship between institutional ownership and earnings quality. Research Hypotheses: To assess the purpose of this study, two research hypotheses are chosen. These hypotheses are as follow:1. There are a significant relationship between institutional ownership and earnings quality. 2. There are a significant relationship between concentrated institutional ownership and earnings quality. Research Method: On the basis of purpose and method this study is practical and descriptive research. In this study, we develop a multidimensional method of measuring earnings quality. That is for measuring the earnings quality, four regression models that measure the difference aspects of earnings quality (such as informative content of earnings, predictive value of earnings, accrual components of earnings, and timeliness of earnings) fits for this purpose. The sample for this study is comprised of 51 firms listed in Tehran Stock Exchange (TSE) during 9 years. Results: In this study, two theories (active monitoring theory and private benefits theory) about institutional ownership examined. Collectively, the results provide conflict evidences about the effect of institutional ownership on earnings quality. Based on these results, institutional ownership and concentrated institutional ownership are not significantly correlated with informative content of earnings and accrual components of earnings. Institutional ownership has negative effect on predictive value of earnings and so, negatively correlated with earnings quality. Therefore, private benefits theory is approved. But concentrated institutional ownership has positive effect on predictive value of earnings. Institutional ownership is positively correlated with reporting lag and so, negatively correlated with earnings quality. However, concentrated institutional ownership is not significantly correlated with reporting lag. Discussion and Conclusion: The results show conflicting relationships between institutional investors and earnings quality. Therefore, these owners have different effects on various dimensions of earnings quality.

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Issue Info: 
  • Year: 

    2010
  • Volume: 

    2
  • Issue: 

    1 (58/3)
  • Start Page: 

    251
  • End Page: 

    270
Measures: 
  • Citations: 

    8
  • Views: 

    1435
  • Downloads: 

    456
Abstract: 

Introduction: No doubt the advent of joint-stock companies in the industrial world is one of the biggest economic developments and probably the most important factor of industrial development. Separation of ownership from administration, existence of natural difference in the function of their desirability resulting into the contrariety of benefits and thus forming owner-agent relationship and agency theory are the outcome of this phenomenon. The problem of the interference of rights in general and the risk of rights of minority shareholders to be lapsed by high level influential shareholders, specifically, has been an important owner-agent difficulty in most countries. Scandals of accounting and the downfall of companies like Enron, World Com of America and Tel Van Company in Australia have caused serious anxieties about firm performance, making use of the reported profit and moral problems of those who audit and prepare these reports. Legislative organizations in Australia and America reacted against bankrupt companies and disclosed embezzlement by improving the principle of corporate governance. For the same purpose, U.S.A to respond to the above mentioned bankruptcy levied the law of Sarbanes-Oxley in July 2002. Regarding these reactions it is expected that firm performance and corporate governance mechanisms are highly interrelated. This research is focused on achieving the effectiveness of some of these mechanisms and methods on the firm performance. Identifying the ways and means having an impact on the firm performance is very important. It is so that the investors being doubtful about the impartiality of the given information will behave more conservatively and consequently affect the efficiency of capital market. Research Questions or Hypothesis: One of the goals of the present study is to examine the relationship between the firm performance and the board size. So the first hypothesis is defined as the following:H 1: There is a significant relationship between the firm performance and the board size. Most of the studies highlight the relationship between the existence of outside directors in the combination of the board and the firm performance. Therefore the second hypothesis is defined as the following:H 2: There is a significant relationship between the existence of outside directors in the combination of the board and the firm performance. One of the aims of this study is to investigate the relationship between the number of meetings held by the board of directors in the company and the firm performance. Below the third hypothesis was introduced in this regard:H 3: There is a significant relationship between the firm performance and the number of meetings held by the board of directors in the company.Most of the research studies have found a relation (whether positive or negative) between the firm performance and the level of financial expertise in the board members. Therefore the fourth hypothesis of this research is determined as the following:H 4: There is a significant relationship between the firm performance and the level of financial expertise in the board members. Finally the fifth hypothesis of this research is determined as the following:H5: There is a significant relationship between the firm performance and the separation of chief managers’ roles from other boards. Methods: In this research, the performance rank of the firms has been evaluated on the basis of five factors including income increase, operational profit increase, pure profit increase, propriety outcome and shareholders’ revenue outcome. Regarding previous research, the firm size and the financial leverage were considered as control variables. Therefore, the required data was gathered from 71 accepted companies in Tehran Stock Exchange, within 2001 and 2008; Spearman correlation test was utilized at the next step. Results: In this study results show that there is no significant relationship between board of director characteristics (including board size, the proportion of COF boards, the number of boards meetings, their financial knowledge, the separation of chief managers’ roles from other boards) and the Firm Performance.Discussion and Conclusion:This study aimed at investigating the relationship between board of director characteristics (including board size, the proportion of COF boards, the number of boards meetings, their financial knowledge, the separation of chief managers’ roles from other boards) and the firm performance. The results show that boards do not carry out their responsibilities for reducing their representatives’ problems in Iran capital market and do not have a significant effect on firm performance.

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Issue Info: 
  • Year: 

    2010
  • Volume: 

    2
  • Issue: 

    1 (58/3)
  • Start Page: 

    39
  • End Page: 

    66
Measures: 
  • Citations: 

    5
  • Views: 

    233
  • Downloads: 

    104
Abstract: 

Introduction: This study is about the incremental information content of operating cash flow changes with regard to explaining dividend changes of given earning. Also, role of attribute of growth, leverage and size of the firms are discussed in the relationship between operating cash flow changes and dividend changes. Arguments are provided by Charitou and Vafeas (1998) to explain the advantages of cash flow over accruals in explaining dividend changes. First, managers may manipulate accruals to maximize their interests. To the extent that accruals are manipulated, the cash flow component of earning is expected to be a more reliable indicator of firm performance than the accruals component. Therefore, the cash flow component of earnings is expected to be a better predictor of dividend changes than the accruals components. Second, cash flows are a more direct measure of liquidity and liquidity is an important factor in dividend policy setting. Thus, cash flows are expected to be more useful than accrual in determining dividend changes.Research hypothesis : In order to achieve the objective of this research, the following hypotheses are developed and tested: H 1: Operating cash flows changes are positively related to dividend changes, given earnings changes. H 2: The relationship between operating cash flow changes and dividend changes is significantly positive for firms with moderate growth prospects. H 3: The relationship between operating cash flow changes and dividend changes is significantly positive for firms that have high leverage. H 4: The relationship between operating cash flow changes and dividend changes is significantly positive for small firms.Methods: We carried out a 329 firm-year study by analyzing the dividend changes-operating cash flow changes relationship on a sample of 47 quoted firms in Tehran Stock Exchange (TSE) over a wider testing period from 2000 to 2007. The models are estimated using the ordinary least squares (OLS) method. The tests of hypothesis will be done with cross-sectional and pooling data. Results: The regression results for hypothesis 1 show that there is a significant relationship between dividend changes and operating cash flow changes unlike previous studies. The empirical results for hypothesis 2 reveal that the relationship between operating cash flow changes and dividend changes does not depend on growth opportunities. Also, the empirical results for hypothesis 3 and 4 indicate that this relationship between operating cash flow changes and dividend changes depend on the capital structure choice and size of each firm. Discussion and Conclusion: Based on finance literature one of the most important factors in determinant dividend payout policy is firm’s performance. Empirical evidence in International level showed that earnings capture firm performance and thus, earnings are highly related to dividend changes. Earnings, however, is the sum of an operating cash flow component and an accruals component. Researchers such as Adelegan (2003) argued that the accruals component of earnings measures firm performance less reliably than the cash flow component, because accruals are subject to manipulation, then the cash flow component of earnings. Therefore, cash flow component of earnings should have incremental power in explaining dividend changes, giving earnings. The findings of this study reveal such an effect. The correlation matrix and pooled cross-sectional time series regression test reveals that in Tehran Stock Exchange cash flow changes are a better measure of liquidity that are highly significant. We also investigated the importance of cash flow changes in setting dividend policy. In particular, we investigated contextual factors that are potentially important in mitigating the relationship between cash flows changes and dividend changes. The results revealed that in Tehran Stock Exchange the relationship between operating cash flow changes and dividend changes do not depend on growth opportunities. In conclusion, there is enough evidence to conclude that the relationship between operating cash flow changes and dividend changes depend on the capital structure choice and size of each firm, but firm growth potentials are not effective.

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Issue Info: 
  • Year: 

    2010
  • Volume: 

    2
  • Issue: 

    1 (58/3)
  • Start Page: 

    67
  • End Page: 

    84
Measures: 
  • Citations: 

    2
  • Views: 

    316
  • Downloads: 

    109
Abstract: 

Introduction: One of the important aspects of today emerging markets is paying attention to capital factor and effective methods to value creation and risk management in firms. This requires having a comprehensive knowledge of the position the company in the financial markets and environment impact on the performance of different companies in different industries. Because of different of internal variables in every firm and industry, today credit rating of companies largely depends on their capital structure and the basis of production and services, how to finance and consumption (Myers and Sussman, 2003). There is little knowledge about the factors affecting capital structure of the companies that exist in developing economies. Knowledge of factors affecting capital structure in such environments is very important. Utilizing previous empirical researches in Tehran Stock Exchange and their findings could be useful in simulation of effective variables in this regard. In fact, those findings are often the results of implementing financial management theories in our country. Iran is one of those countries that the presence of government in various industries is evident and most of these industries are still under the supervision and control of state government financial and operational policies. Potential relationship between the government and political patronage and capital structure is very important, though it has not been considered hitherto. Previous empirical studies that help us gain awareness of the components which determination capital structure the companies are mainly based on America, European and other developed countries firms. The first effort in this field investigating the relationship between institutions and capital structure took place by Rajan and Zyngals (1995) followed by other researchers such as Johnson and Mitton (2003); but the same subject has not been studied in Iran.Each company's capital structure provides information about the probability of financial distress and in strategic planning, it is needed to determine the factors affecting the efficiency of their financing seriously considered. Various factors such as size, position management, production and sales, sources of raw materials acquisition, access to financing markets, and economic and political environment affect these decisions. Research Hypothesis: This study also used the results of previous studies on factors affecting capital structure, to investigate the effect of ownership type of company. The results of the action on the issue of environmental research show significant correlation between company capital structure and the type of ownership company (or the political patronage). The main research question in this study is whether there is any relationship between political patronage and the company's capital structure? In this regard there are several other questions also as below:Is there any relationship between company’s capital structure and these variables: size of the company, tangible assets, profitability, and stock market price? Methods: Firms in the statistical population of this study are the companies accepted in Tehran Stock Exchange. The study period is between the years 1377 to 1386, and 133 companies were investigated. Research method in this study is exploring and determining the relationship between dependent and independent variables by using regression and correlation. In this research, we are investigating presence or absence of relationship between the governmental and political patronage of company and its capital structure. For this purpose, using regression analysis and analysis of panel data, best relationship (if any connection) between dependent and independent variables are estimated. Regression analysis of data and the analysis of panel data collection (year and company) were used for estimating the parameters. Results: Results indicate significant positive correlation between capital structure and the political patronage, firm size, investment and growth opportunities. In other words, capital structure is under the effect of political patronage in Iran’s environment. Also there is a negative relationship between capital structure and tangible assets and return of assets. Obtained results emphasize that there is a lack of sufficient attention to the efficiency of capital resources, and inappropriate increase in volume of liabilities with no regard to its efficiency and capacity of borrowing in firms under political patronage in Iran. This is accordance with the test results done by the Fraser, Zhang, and Derashid (2005) in Malaysia.

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Issue Info: 
  • Year: 

    2010
  • Volume: 

    2
  • Issue: 

    1 (58/3)
  • Start Page: 

    85
  • End Page: 

    119
Measures: 
  • Citations: 

    4
  • Views: 

    249
  • Downloads: 

    125
Abstract: 

Introduction: Uncertainty and ambiguity in all aspects of today's life is unavoidable. In Heisenberg's Uncertainty Theory, uncertainty exists in the nature of events (Hammer, 1990). Accounting and financial reporting are not exceptions to this rule. Controls, probability of receiving payable accounts, profitability of assets, and in future cash flow are examples of this unavoidable ambiguity. Conservatism principle is the first and the most important way to face accounting transaction and events uncertainty. This principle come from Business Caveats Emptor that say payer must be careful to consistency in quality and quantity that is achieved with what he pays money for. Conservatism is one of the historical accounting principles and in the opinion of some theoreticians, conservatism is only a very primary and simple solution for facing future accounting ambiguity. This article investigates existence of conservatism in Tehran Stock Exchange. Research Hypothesis To achieve the purpose of this study four research hypotheses were created. These research hypotheses are listed below:1. There is income asymmetry existence in companies accepted in Tehran Stock Exchange. 2. There is a difference in Non Operational Accrual on duration. 3. There is a significant different between Skewness of operational cash flow and Skewness of cash division. 4. Difference between market value and book value can be divided to fixed and variable sections. Methods: This study is a semi-empirical research and uses parametric and nonparametric tests for investigation. The study began with review theories and related literature of accounting conservation principle, then variations were calculated and lastly statistical tests were run and results were achieved.The variations used in this article are:a. Stock return. b. Kind of profitability, which is dummy variation profitability. c. Book value of equity at the end of fiscal year. d. Market value of equity at the end of fiscal year. e. Profit before extra ordinary items to market value of equity. f. Non Operational Accrual g. Operational cash flow. Using current models in related literature, the present article investigates the existence of conservation. For testing hypothesis we use below models:1. Basu's (1997) model that is explained in the following equitation: Eit / Pit-1 = ait + bRit + hDRit + gRitDRit + eit 2. Givoly and Hayn's (2000) model explained in the following equitation: ACCit = (NIit + DEPit) – CFOitOACCit = D(ARit + Iit + PEit) - D(APit + TPit) NOACCit = ACCit – OACCit3. Bevear and Rayn's (2000, 2005) model that tries to recognize conditional conservation and unconditional conservation and with comparing lag in accounting in duration of time. The research data was infact prepared by studying 194 corporations which have been active in Tehran Stock Exchange during 1999-2008. For the purpose of testing hypothesis, we used simple multi-regression analysis in enter mode, independent samples T Test, one-way ANOVA analysis, Kolmogorov–Smirnov test, Kruskal-Wallis test and skewness of distributions for statistical analysis. Results The results show that the difference in the timeliness of bad versus good news does not exist for the most parts (in levels of all corporate and different industries). In addition, meaningful difference in non-operational accruals in the course of time depends on statistical test. We observed a difference in skewness of distributions for operational cash flow and distributions divided in cash. In all corporations level skewness of distributions for operational cash flow is high but in different industries level Skewness of distributions for divided in cash is higher. Lastly testing on differences between market value and book value of net assets indicates that both kinds of conservation (conditional and unconditional) exist in both levels and they are ascending in periods of research. Discussion & Conclusion Results of research shows different conclusions so to accept or to reject the existence of conservatism in Tehran Stock Exchange is not so simple and clear. The reason is because of the use of different models assumptions and conditions each of which can be considered in different positions. In fact, Basu's model tries to study stock return and asymmetric timeliness for speed in action of market when it achieves good news (profit) versus bad news (loss), but Givoly and Hayn's model studies the amount of non-operational accruals that management used in accounting and financial reporting, and lastly Bevear and Rayn's model tries to study conditional conservatism and unconditional conservatism; in addition they are different in their use of skewness of distributions for operational cash flow, and Skewness of distributions for divided in cash.

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