The Effect of Asymmetric Cost Behavior and Presentation Formats on Costs Prediction Accuracy: An Explanation of Brunswick`s Lens Model
sasan
mehrani
author
omid
faraji
author
text
article
2017
per
This study investigated the effects of cognitive bias factors on the quality of judgment and decision making in cost prediction. In particular, we conduct a laboratory experiment with a 2×4 design mixing a within-subjects condition with a between-subjects condition. The sample of this study is 78 managers with financial expertise and graduate students, and the period of data collection is 2016. In this study, two independent variables that affect the accuracy of judgment are manipulated as follows: (1) the cost structures or degree of cost asymmetry (i.e. non-sticky, semi-sticky, sticky and anti-sticky) and (2) the presentation format of financial information (i.e. table vs. graph). Also, the dependent variables of research are as follows: 1. quality or accuracy of cost prediction (mean absolute error of the individual`s predictions) and 2. variables of Brunswick`s lens model. The main hypotheses test is performed using a repeated-measures ANCOVA and pairwise comparison. In accordance with our expectation, participants are more likely to recognize and predict accurately symmetric cost behavior (non-sticky) rather than asymmetry cost behavior (i.e. sticky and anti-sticky). In other words, they mentally apply a symmetric model to predict changes of asymmetric costs. Moreover, the presentation of information expressed as table allows more accurate predictions. Also, the results show that presentation of information in table rather than graph is more beneficial for effective perception of asymmetric cost behavior.
Applied Research in Financial Reporting
Audit Organization
2345-3125
6
v.
1
no.
2017
7
34
https://www.arfr.ir/article_53107_e46083b0438e7ab5d09f76f7709126cc.pdf
Investigating the Effect of Audit Committee's Activities on Financial Reporting
seyedmostafa
alavi
author
mohammad hosein
ghaemi
author
javad
rezazadeh
author
text
article
2017
per
Financial scandals and massive fraud in recent yearsencouragelawmakers and regulators to strengthen corporategovernance, includingcreation the audit committee. Among many objectives that considered in audit committee, includingimproving of quality financial reporting and financial health as well asincreased transparency and disclosure of information. A subject that discussedin this paper is how much effective the committee in achieving consider goals. Inthis study disclosure score, and prior period adjustments use as measure ofquality of financial reporting. By applying pre-test and post-test for bothtest and control groups, evaluated effect of the audit committee's activitieson financial reporting. Data used from 1391 to 1394. Results show there is notsignificant differences between the disclosure score and the number andrelation of prior period adjustments gap, post-test between experimental andcontrol groups. Contrary to these findings, the results of additional testsbased on the method of the event study show that the formation of auditcommittees for testing companies and without regard to control groups, led to areduction in the number of prior period adjustments and increase the disclosurescore of corporate information
Applied Research in Financial Reporting
Audit Organization
2345-3125
6
v.
1
no.
2017
35
66
https://www.arfr.ir/article_53108_9b6bd6ac802a02b2dc3f62423838dd9f.pdf
Investigating the Audit Expectation Gap between External Auditors and Users of Auditing Services
fattah
behzadian
author
naser
izadinia
author
text
article
2017
per
Using an analytical framework on the factors affecting the quality of audit services, the factors affecting the expectation gap between audit services providers and users with regard to the factors affecting audit quality were investigated in professional environment of Iran in this study. The factors investigated within the professional people’s expectation gap were the professional features including people’s professional role in the audit process (Auditors versus preparers of financial statements), people’s professional experience, and audit firms’ professional ranking and size. The first statistical population consisted of certified public accountants working in audit organization of Iran and audit firms, and the second one comprised all investment companies which function under the supervision of Tehran Stock Exchange. Based on the results, the role of professionals in the audit process as independent auditors or providers of financial statements as well as people’s professional experience did not affect expectation gap of audit quality. However, the size of the audit firms and the professional ranking of them have influenced on the expectation gap of the professionals participating in this study about the impact of audit regulation on audit quality.
Applied Research in Financial Reporting
Audit Organization
2345-3125
6
v.
1
no.
2017
67
88
https://www.arfr.ir/article_53109_845bf0fe5ac7fa37e0d7268940517eab.pdf
The Effective Factors Determination of Modified Audit Opinion- The Meta Analysis Method
mohammadreza
abbassazeh
author
mahdi
salehi
author
reza
hoseinipour
author
text
article
2017
per
The purpose of this paper is to use meta-analysis method to determine the effect of auditor and audit-related variables and firm-specific variables on auditors’ tendency to issue modified audit opinions. Auditor and audit-related variables include Auditor firm size, audit firm industry specialization, audit firm and audit partner tenure and audit report presentation lag. Firm-specific variables include firm size, leverage, previous year modified audit opinions, and profitability. The Stouffer combined test is used as the meta-analysis technique for this paper. The test is resulted a z-statistic that can be used to test the direction and significance of the effect of the hypothesized variables on the tendency of auditors to issue modified audit opinions. 8 internal articles and 58 external published studies are aggregated from 1385 to 1395 and 1982 to 2016. Findings reveal that the effect of audit and auditor-related variables on audit opinion decisions is far from conclusive. Auditor firm size and audit report presentation lag variables are found to be significantly related. audit report lag and Auditor firm size are found to be positively and audit firm industry specialization and audit firm and audit partner tenure are found be negatively related. However, in IR studies, these relationships are not founded. In contrast, firm-specific variables include firm size and profitability on auditors’ tendency to issue modified audit opinions are more important.
Applied Research in Financial Reporting
Audit Organization
2345-3125
6
v.
1
no.
2017
89
126
https://www.arfr.ir/article_53110_3e0798da2cb209f78945722deae4362b.pdf
Studying the Effect of Earnings Announcement Lag on the Relation between Voluntary Disclosure and Cost of Equity
mohammad reza
Nikbakht
author
kaihan
azadi
author
arya
aminpour
author
farid
Gholami Hasankiadeh
author
text
article
2017
per
The aim of this paper is studying the effect of timely disclosure on the relation between voluntary disclosure and cost of equity capital. In this regard, a Pourheidary's disclosure checklist, Gordon’s growth model and a dummy variable based on Ashton et al definition were respectively used for measuring companies’ disclosure score, their cost of equity capital and their timely disclosure. Also, the number of one hundred eleven companies listed on Tehran Securities Exchange during 2010 to 2014 (totally 560 firm-year observations) were selected as the sample of research using systematic screening method. Furthermore, required data related to these observations were collected from ‘Codal’ database and ‘Rahavard Novin’ software. The results of hypotheses testing applied with regression analysis showed a significant negative relation between voluntary disclosure and cost of equity capital. Also, tests implicate a significantly negative association between timely disclosure and cost of equity capital. In addition, the tests demonstrated that interaction effect of voluntary and timely disclosure on cost of equity capital is negative and significant. In the other words, the reducing effect of voluntary disclosure on cost of equity capital of companies that timely disclose their information is more than companies that untimely disclose their information.
Applied Research in Financial Reporting
Audit Organization
2345-3125
6
v.
1
no.
2017
127
152
https://www.arfr.ir/article_53111_082b048f09b052368ce4b72d7dc5ca25.pdf
The Effect of Precision and Sensitivity Dimensions of profit on Board of Directors Bonus
seyed ali
zaez
author
amir hosein
Montazer Hojat
author
rahim
Bonabi Gadim
author
text
article
2017
per
Nowadays, due to agency problems caused by the separation of ownership from management, efforts to create a balance between the interests of them have become one of the intellectual concerns of companies. If the reward is not commensurate with board of directors actual performance not only increase corporate value but also is a means to transfer wealth from owners to managers. From the important indicators in measuring performance in bonus plans is the precision and sensitivity of reported earnings. In this study, the precision and sensitivity indicators of profit and their effect on board of directors bonus has been studied. To test the assumptions, data related to the sample of 121 companies listed in Tehran Stock Exchange for the period 2009 to 2016 were used and the above mentioned data have been analyzed using multivariate regression and Panel data analysis method. The results show that from the precision dimensions of profit, the abnormal accruals and Manipulation activities in the form of increased profits according to research expectations has significant and positive impact on bonus that indicated the lack of sufficient attention to them as a decreasing indicator of profit precision while expense matching and cash flow forecast precision according to research expectations have significant effect on board of directors bonus. The sensitivity dimensions of profit i.e. earnings response coefficients and returns fluctuations Indicators, have a positive and negative impact on board of directors bonus respectively.
Applied Research in Financial Reporting
Audit Organization
2345-3125
6
v.
1
no.
2017
153
182
https://www.arfr.ir/article_53112_848d798621ca2cd452cc71bb66300482.pdf
Investigating the Effect of Accounting System on the DuPont Analysis by Market Participants
aziz
ghord
author
mohammad
rahimpour
author
salman
hamidi
author
text
article
2017
per
Due to the fact that, the dominant approach in accounting standards is historical cost, the present study attempts to investigate whether the use of the system of historical cost for assets causes a decrease in the usefulness of DuPont ratio for investor or not. When in sum items the system of historical cost is adjusted the ratio of accounting tends to increase because of new evaluation. This fluctuation of the asset turnover in the form of DuPont ratio could result from economic forces and the effect of measurement system. In order to evaluate the range of the effect of measurement system, an average of the assets age is used. The sample under the study consisted of 145 companies during years 2005 to 2015. The result indicated that the asset turnover ratio and their persistence had a positive significant correlation with the asset age. In addition the error of the predication of the assets age had a positive significant correlation with the asset age and the future return of the companies.
Applied Research in Financial Reporting
Audit Organization
2345-3125
6
v.
1
no.
2017
183
208
https://www.arfr.ir/article_53113_89e779212f6ae1420975f0a7e70247f5.pdf