ORIGINAL_ARTICLE
Value relevance of voluntary disclosure in capital market of Iran
Companies’ voluntary disclosure is one of the most important management tools to convey information about the financial performance to investors, creditors and other stakeholders. One of the important reasons of the request for disclosure of information is agency problem and asymmetry of information. This study aims to examine value relevance of voluntary disclosure using models of Olson (1995), Easton and Harris (1991) and the value of firms with regard to the effect of endogeneity of voluntary disclosure variable. For this purpose, the voluntary disclosure index was calculated and tested for 146 companies listed in Tehran Stock Exchange during the period 1388-1392 using content analysis method and the same weighting approach. The results of this research reveal that companies’ voluntary disclosure is used in their decision-making and valuation of companies. The results from the study of non-linearity in the relation between voluntary disclosure and firm value confirm the positive significant effect of enhanced voluntary disclosure levels on the value of firms.
https://acctgrev.ut.ac.ir/article_55656_b7a39cc4cd1a16142514d8199b90d6ad.pdf
2015-09-23
279
300
10.22059/acctgrev.2015.55656
Firm Value
Stock Price
Stock Return
Voluntary disclosure
Nazanin
Bashirimanesh
bashirimanesh@gmail.com
1
PhD Student in Accounting, Faculty of Social Sciences and Economy, University of Alzahra, Tehran, Iran
LEAD_AUTHOR
Ali
Rahmani
rahmani.ali@gmail.com
2
Associate Professor, Faculty of Social Sciences and Economy, University of Alzahra, Tehran, Iran
AUTHOR
Seyyed Ali
Hosseini
a.hosseini@alzahra.ac.ir
3
Assistant Professor, Faculty of Social Sciences and Economy, University of Alzahra, Tehran, Iran
AUTHOR
Mirhossein
Mosavi
hmousavi@alzahra.ac.ir
4
Assistant Professor, Faculty of Social Sciences and Economy, University of Alzahra, Tehran, Iran
AUTHOR
Abbott, W. F. & Monsen, R. J. (1979). On the measurement of Corporate Social Responsibility: Self-Reported Disclosure as a Method of Measuring Corporate Social Involvement. Academy of Management Journal, 22(3): 501-515.
1
Al-Akra, M. & Jahangir Ali, M. (2012). The value relevance of corporate voluntary disclosure in the Middle-East: The case of Jordan. Journal of Accounting and Public Policy, 31(5): 533–549.
2
Alfaraih, M. & Alanezi, F. (2011). The usefulness of earnings and book value for equity valuation to Kuwait stock exchange participants. International Business & Economics Research Journal, 10(1): 73-89.
3
Alfaraih, M. & Alanezi, F. (2011). Dose voluntary disclosure level affect the value relevance of accounting information? Accounting & taxation, 3(2): 65-84.
4
Ball, R. & Brown, P. (1968). An empirical evaluation of accounting income numbers. Journal of Accounting Research, 6(2):159-178.
5
Banghøj, J. & Plenborg, T. (2008). Value relevance of voluntary disclosure in the annual report. Journal of Accounting and Finance, 48 (2): 159–180.
6
Bashirimanesh, N. & Rahmani, A. (2015). Design and explanations of voluntary disclosure model. Thesis of Doctor of Philosophy, Tehran, University Alzahra.
7
Binh, T.Q. (2012). Voluntary Disclosure Information in the Annual Reports of Non -Financial Listed Companies: The Case of Vietnam. Journal of Applied Economics and Business Research (JAEBR), 2(2): 69-90.
8
Botosan, C.A. (1997). Disclosure Level and the Cost of Equity Capital. The Accounting Review, 72(3): 323-349.
9
Collins, D. W., Kothari, S., Shanken, J. & Sloan, R. (1994). Lack of timeliness versusnoise as explanations for low contemporaneous return–earnings association. Journal of Accounting and Economics, 18(3): 289–324.
10
Cooke, T.E. (1989). Voluntary corporate disclosure by Swedish companies. International Financial Management and Accounting, 1(2): 171-195.
11
Easton, P. D. & Harris, T. S. (1991). "Earnings as an Explanatory Variable for Returns. Journal of Accounting Research , 29(1): 19-37.
12
Feltham, G. & Ohlson, J.A. (1995). Valuation and Clean Surplus Accounting for Operating and Financial Activities. Contemporary Accounting Research 11(2): 689- 731.
13
Gelb, D. S. & Zarowin, P. (2002). Corporate disclosure policy and the in formativeness of stock prices. Review of Accounting Studies, 7 (1): 33–52.
14
Guthrie, J. & Matthews, M. R. (1985). Corporate social accounting in Australia. In: E, P. L. (ed.) Research in corporate social performance and policy. 7(1): 251-277
15
Guthrie, J., Boedker, C. (2006). Perspectives on "new" models of business reporting: A reflective note. Accounting Auditing and Accountability Journal, 19 (6): 785 - 792,
16
Haniffa, R. M. & Cooke, T. E. (2002). Culture, Corporate Governance and Disclosure in Malaysian Corporations. Abacus, 38(3): 317-349.
17
Hassan Giorgioni, G. & Romilly, P. (2006). The Extent of Accounting Disclosure and its Determinants in an Emerging Capital Market: the Case of Egypt International. Journal of Accounting, Auditing and Performance Evaluation, 3(1): 41-67.
18
Hassan, O., Romilly, P., Giorgioni, G. & Power, D. (2009). The value relevance of disclosure: Evidence from the emerging capital market of Egypt. The International Journal of Accounting, 44(1): 79–102.
19
Heitzman, S., Wasley, C. & Zimmerman, J. (2010) The joint effects of materiality thresholds and voluntary disclosure incentives on firms’ disclosure decisions. Journal of Accounting and Economics, 49(1): 109-132.
20
Holthausen, R.W. & Watts, R.L. (2001). The relevance of the value relevance literature for financial accounting standard setting. Journal of Accounting and Economics, 31 (1–3): 3–75.
21
Hussainey, K., and Walker, M. (2009). The effects of voluntary disclosure and dividend propensity on prices leading earnings. Accounting and Business Research, 39 (1): 37-55.
22
Khodamipour, A. & Mahroomi, R. (2012). Effect of voluntary disclosure on value relevance of earnings per share. Journal of Management Accounting, 14(3): 1-12. (in Persian)
23
Lee, S. & Xiao, Q. (2011). An examination of the curvilinear relationship between capital intensity and firm performance for publicly traded US hotels and restaurants. International Journal of Contemporary Hospitality Management, 23 (6): 862- 880.
24
Li, F. (2010). The Information Content of Forward-Looking Statements. in Corporate Filings-A Na¨ıve Bayesian Machine Learning Approach. Journal of Accounting Research, 48 (5):1049-1102
25
Luo, S., Courtenay, S. & Hossain, M. (2006). The effect of voluntary disclosure, ownership structure and proprietary cost on the return–future earnings relation. Pacific-Basin Finance Journal, 14(5): 501–521.
26
Mahdavi, G., Behpour, S. & kazemnezhad, F. (2014). Exploring the Relationship between Disclosure Quality and the Performance of Tehran Stock Exchange Companies Using a Simultaneous Equations System. The Iranian accounting and auditing review, 21(3): 371-386. (in Persian)
27
Maranjory, M. & Alikhani, R. (2014). Social Responsibility Disclosure and Corporate Governance. The Iranian accounting and auditing review, 21(3): 329-348. (in Persian)
28
Mashaykhi, B., Seyyedi, S.J & Zargaran Yazd, H. (2014). The effective factors on disclosure of intellectual capital in listed companies in Tehran stock exchange. The Iranian accounting and auditing review, 21(2): 251-270.
29
(in Persian)
30
Moumen, N., Othman, H.B. & Hussainey, K. (2015). The Value Relevance of Risk Disclosure in Annual Reports: Evidence from MENA Emerging Markets. Research in International Business and Finance, 34(3): 96-112.
31
Ohlson, J. A. (1995). Earnings, book values, and dividends in equity valuation. Contemporary Accounting Research, 11(2): 661- 687.
32
Pourheydari, A. & Arababadi, R. (2014). The Impact of Stock Price Changes on Voluntary Disclosure in Firms Listed in Tehran Stock Exchange (TSE). The Iranian accounting and auditing review, 21(1): 39-56. (in Persian)
33
Pourheydari, A. & Hosseinpour, H. (2012). The Relationship between mandatory and voluntary disclosure and stock value. Journal of Financial Management and Accounting Perspective, 2(5): 9-28. (in Persian)
34
Rahimi Esfeh-Salari, D. & Zareai, S. (2013). The effect of changes of voluntary disclosur in the value of the company's. The first national conference of accounting and management, Shiraz, Institute of International Education and Research Kharazmi, 2013/16/9. (in Persian)
35
Samudhram, A., Stewart, E., Wickramanayake, J. & Sinnakkannu, J. (2014). Value relevance of human capital based disclosures: Moderating effects of labor productivity, investor sentiment, analyst coverage and audit quality. Advances in Accounting, incorporating Advances in International Accounting, 30(2): 338–353.
36
Vafaei, A., Taylor, D. & Ahmed, K. (2011). The value relevance of intellectual capital disclosures. Journal of Intellectual Capital, 12 (3): 407-429.
37
Valipour, H., Talebnia, G. & Ahmadi, R. (2014) .Effects of voluntary disclosure on the value relevance of accounting information value in listed companies in Tehran Stock Exchange. Journal of knowledge of management Accounting and auditing, 7(21): 71-81. (in Persian)
38
Wang, Z., Al-Akra, M. & Jahangir Ali, M. (2013). Value relevance of voluntary disclosure and the global financial crisis: evidence from China. Managerial Auditing Journal, 28 (5): 444-468.
39
Wang, M. & Hussainey, K. (2013). Voluntary forward-looking statements driven by corporate governance and their value relevance. J. Account. Public Policy, 32(2): 26-49.
40
ORIGINAL_ARTICLE
The impact of corporate tax risk on audit fee
Auditors use several factors for pricing of audit services. Theoretically, corporate risk and complexity are the main factors affecting audit fees. The purpose of this study is to evaluate the impact of corporate tax risk on audit fees. This risk is quantificated through the company's effective tax rate. In this regard, if the effective tax rate is lower, tax avoidance is considered higher. For this purpose, a sample of 62 companies listed on TSE from 2009 to 2014 is selected. Research hypotheses have been examined using regression analysis. Results show that a significant negative (positive) correlation exists between effective tax rate (corporate tax risk) and audit fees. In other words, if the corporate tax risk is higher, audit fee will be more. Furthermore, the results reveal a significant positive relationship between firm size and reported loss with the audit fees and a negative significant relationship between financial leverage and unqualified audit opinion with the audit fees.
https://acctgrev.ut.ac.ir/article_55657_f832b99547315aabd59d15446a8f863a.pdf
2015-09-23
301
318
10.22059/acctgrev.2015.55657
Audit fees
Effective Tax Rate
Tax avoidance
unqualified audit opinion
Omid
Pourheidari
opourheidari@uk.ac.ir
1
Professor in Accounting, Shahid Bahonar University, Kerman, Iran
AUTHOR
Mojtaba
Golmohammadi Shuraki
mojtaba_g647@yahoo.com
2
PhD Student in Accounting, Shahid Bahonar University, Kerman, Iran
LEAD_AUTHOR
Accounting Standards Setting Committee. (2012). Auditing Standards. Tehran: Audit Organization. (in Persian)
1
Accounting Standards Setting Committee. (2014). Accounting Standards. Tehran: Audit Organization. (in Persian)
2
Al-Harshani, M. O. (2008). The pricing of audit services: evidence from Kuwait. Managerial Auditing Journal, 23(7): 685-696.
3
Arabmazar, A.A. & Dehghani, A. (2010). An Estimation of Business and Profession / Corporate Income Tax Efficiency in Provincial Tax Offices. Journal of tax research, 17(7): 45-64. (in Persian)
4
Ayers, B., Laplante, S. & Mcguire, S. (2010). Credit Ratings and Taxes: The Effect of Book–Tax Differences on Ratings Changes. Contemporary Accounting Research, 27 (2): 359-402.
5
Banimahd, B., Moradzadeh, M. & Zeinali, M. (2013). Effect of audit fee on audit opinion. Management Accounting, 15(5): 41-54. (in Persian)
6
Bell, T., Landsman, W. & Shackelford, D. (2001). Auditors’ Perceived Business Risk and Audit Fees: Analysis and Evidence. Journal of Accounting Research, 39 (1): 35-43.
7
Donohoe, M. & Knechel, R. (2014). Does corporate tax aggressiveness influence audit pricing? Contemporary Accounting Research, 31 (1): 284-308.
8
Dunn, K. & Maydew, B. (2004). Audit firm industry specialization and client disclosure quality. Review of Accounting Studies, 9(1): 35-58.
9
Dyreng, S., Hanlon, M. & Maydew, E. (2008). Long-run corporate tax avoidance. The Accounting Review, 83 (1): 61-82.
10
Graham, J., Raedy, J. & Shackelford, D. (2012). Research in accounting for income taxes. Journal of Accounting and Economics, 53(1-2): 412-434.
11
Gul, F. A., Chen, C.J.P. & Tsui, J.S.L. (2003). Discretionary Accounting Accruals, Managers’ Incentives, and Audit Fees. Contemporary Accounting Research, 20 (3): 441-464.
12
Hanlon, M. & Heitzman, S. (2010). A review of tax research. Journal of Accounting and Economics, 50(2-3): 127-178.
13
Hanlon, M. & Slemrod, J. (2009). What Does Tax Aggressiveness Signal? Evidence from Stock Price Reactions to News about Tax Shelter Involvement. Journal of Public Economics, 93(1-2):126-141.
14
Hanlon, M., Krishnan, G. & Mills, L. (2012). Audit fees and book-tax differences. Journal of the American Taxation Association, 34 (1): 55-86.
15
Hassasyeganeh, Y. & Alavi Tabari, S.H. (2004). The relationship between Resources spent for internal control and audit fees. Empirical Studies in Financial Accounting, 1(4): 71-96. (in Persian)
16
Hay, D. W., Knechel, R. & Wong, N. (2006a). Audit fees: A meta-analysis of the effect of supply and demand attributes. Contemporary Accounting Research, 23 (1): 141-191.
17
Hejazi, R., Gheitasi, R. & Gheitasi, T. (2012). The impact of accruals and cash flows on audit pricing. Accounting and auditing research, 4(13): 62-77.
18
(in Persian)
19
Khodadadi, V., Ghorbani, R. & Khansari, N. (2014). Investigating the Effect of Ownership Structure on Audit Fees. The IranianAccounting and Auditing Review, 21(1): 57-72. (in Persian)
20
Krishnan, G. & Visvanathan, G. (2008). Do auditors price audit committee’s expertise? The case of accounting vs. non-accounting financial experts. Journal of Accounting, Auditing & Finance, 24(1): 115-144.
21
Malekian, E., Ahmadpour, A. & Talebtabar Ahangar, M. (2013). The relationship between some corporate governance mechanisms, audit fees and meter owneship of companies listed in Tehran Stock Exchange. Journal of financial accounting research, 4(4): 37-50. (in Persian)
22
Nikbakht, M. & Tanani, M. (2010). Test of factors influencing financial audit fees. Journal of financial accounting research, 2(2): 111-132. (in Persian) Rajabi, R. & Mohammadi Khashooei, H.(2008).Agency Costs & Independent Audit Services Pricing. The Iranian Accounting and Auditing Review, 15(4): 35-52. (in Persian) Seetharaman, A., Gul, F. A. & Lynn, S. G. (2002). Litigation risk and audit fees: Evidence from UK firms cross-listed on US markets. Journal of Accounting and Economics, 33 (1): 91-115.
23
Simunic, D. )1980(. The pricing of audit services: Theory and evidence. Journal of Accounting Research, 18 (1): 161-190.
24
ORIGINAL_ARTICLE
A review of the relationship between components of internal financial flexibility at Tehran Stock Exchange (TSE) listed companies
A better improvement in dealing with unprecedented financial problems and an efficient use regarding incoming investment opportunities would be gained through knowing the relationship between components of internal financial flexibility of firms. Management of internal financial flexibility is directly related to how we use cash, debt capacity, as well as their interaction during encountering crisis and external shocks. The present study, hence, examines the relationship between the components of the internal financial flexibility of 69 firms listed on Tehran Stock Exchange during 2003-2012. Therefore, the extracted data were tested and analyzed using descriptive statistical methods and panel data patterns. The results indicate that the debt capacity is not effective in predicting the retention amount of cash resources; yet, the amount of cash resources retention is considered as one of the factors influencing determination of the debt capacity of firms.
https://acctgrev.ut.ac.ir/article_55658_1069573b20f4edf569dcf7fc72d8ccde.pdf
2015-09-23
319
336
10.22059/acctgrev.2015.55658
Cash Holdings
debt capacity
internal financial flexibility
Parviz
Piri
parvizpiry@yahoo.com
1
Assistant Professor, Faculty of Economics and Management, Urmia University, Urmia, Iran
AUTHOR
Samaneh
Barzegari Sadaghiani
s_barzegari69@yahoo.com
2
MSc., Faculty of Economics and Management, Urmia University, Urmia, Iran
LEAD_AUTHOR
Almeida, H., Campello, M. & Weisbach, M. S. (2004). The Cash Flow Sensitivity of Cash. The Journal of Finance, 59(4): 1777-1804.
1
Bates, T., Kahle, K. & Stulz, R. (2009). Why Do U.S. Firms Hold so Much More Cash than They Used to? The Journal of Finance, 64(5): 1985-2021.
2
Berger, P. G., Ofek, E. & Swary, I. (1996). Investor Valuation of the Abandonment Option. Journal of Financial Economics, 42(2): 257-287.
3
Campello, M., Giambona, E., Graham, J. R. & Harvey, C. R. (2011). Liquidity Management and Corporate Investment during a Financial Crisis. The Review of Financial Studies, 24(6): 1944-1979.
4
Chua, SH. (2012). Cash holdings, Capital structure and Financial flexibility. Phd Thesis submitted to the University of Nottingham.
5
Fakhari, H & Taghavi, R. (2009). Quality of Accrual items and Cash. The Iranian Accounting & Auditing Review, 16(57): 69-84. (in Persian)
6
Ferreira. M, & Vilela, A. (2004). Why do firms hold cash? Evidence from EMU Countries. European Financial Management, 10(2): 295–319.
7
Foley, C. F., Hartzell, J. C., Titman, S. & Twite, G. (2007). Why do firms hold so much cash? A tax-based explanation'. Journal of Financial Economics, 86(3): 579-607.
8
Gord, A., Mohammadi, M. & Goldoost, M. (2009). investigating the relationship between corporate governance mechanism and cash holding. The Iranian Accounting & Auditing Review, 22(2): 263-278. (in Persian)
9
Lins, K. V. Servaes, H. & Tufano, P. (2010). What drives corporate liquidity? An international survey of cash holdings and lines of credit'. Journal of Financial Economics, 98(1): 160-176.
10
Ozkan, A. & Ozkan, N. (2004). Corporate cash holdings: An empirical investigation of UK companies. Journal of Banking & Finance, 28(9): 2103-2134.
11
Saeidi, A. & Abesht, K. (2013). Debt capacity in the Firms listed in Tehran Stock Exchange. The Iranian Accounting & Auditing Review, (72): 43-64.
12
(in Persian)
13
Sepasi, S. & Yablouyi, M. (2007). Asymmetric Cash Flow Sensitivity of Cash Holdings. The Iranian Accounting & Auditing Review, 20(4): 61-76.
14
(in Persian)
15
Subramaniam, V., Tang, T. T., Yue, H. & Zhou, X. (2011). Firm structure and corporate cash holdings. Journal of Corporate Finance, (17): 759–773.
16
Sufi, A. (2009). Bank Lines of Credit in Corporate Finance: An Empirical Analysis. Review of Financial Studies, 22(3): 1057-1088.
17
Volberda, H. W. (1998). Building the Flexible Firm: How to remain Competitive. Oxford, Oxford University Press, 2(1): 94-96.
18
ORIGINAL_ARTICLE
The role of liquidity factor in explaining the stock returns: New evidence from Tehran Stock Exchange
This paper examines the role of liquidity factor in explaining the cross-section of stock returns of firms listed on Tehran Stock Exchange. The regression results of CAPM, Liu's two-factor model, the Fama-French three-factor model, and a Four-factor model in eight portfolios formed by Size, B/M Ratio, and Liquidity show that the two-factor (market and liquidity) model outperforms the CAPM in explaining the cross-section of stock returns but not the Fama-French three-factor model. Adding liquidity premium to Fama-French three-factor model notably improves the adjusted R square of the model implying that all four factors of market, size, value, and liquidity play a significant role in explaining stock returns. The results are robust to sensitivity analyses for up and down market conditions and seasonal behavior.
https://acctgrev.ut.ac.ir/article_55659_d7ab75cb104c0e9462173bd52229baa2.pdf
2015-09-23
337
362
10.22059/acctgrev.2015.55659
Fama-French three-factor model
liquidity
Liu's two-factor model
Abdolreza
Talaneh
unistpapers@yahoo.com
1
Associate Professor, Faculty of Management and Accounting, Islamic Azad University, Firoozkuh Branch, Firoozkuh, Iran
LEAD_AUTHOR
Meynoosh
Hosseini
sahbamay@yahoo.com
2
MSc., Faculty of Management and Accounting, Islamic Azad University, Firoozkuh Branch, Firoozkuh, Iran
AUTHOR
Abbasi, E. & Ghezeljeh, Gh. (2012). Examining Fama-French three-factor model in explaining portfolios' returns. Journal of accounting knowledge, 4(11): 161-180. (in Persian)
1
Amihud, Y. (2002). Illiquidity and stock returns: cross-section and time-series effects. Journal of Financial Markets, 5 (1): 31–56.
2
Amihud, Y. & Mendelson, H. (1986). Asset pricing and the bid-ask spread. Journal of Financial Economics, 17(2): 223–249.
3
Banz, Rolf, W. (1981). The Relationship between Return and Market Value of Common Stocks. Journal of Financial Economics, 9(1): 3-18.
4
Bartholdy, J. & Peare, P. (2005). Estimation of expected return: CAPM vs. Fama and French. International Review of Financial Analysis, 14(4): 407-427.
5
Basu, S. (1977). Investment Performance of Common Stocks in Relation to Their Price-Earnings Ratios: A Test of the Efficient Market Hypothesis. Journal of Finance, 32(3): 663-682.
6
Basu, S. (1983). The Relationship between Earnings Yield, Market Value, and Return for NYSE Common Stocks: Further Evidence. Journal of Financial Economics, 12(1): 129-156.
7
Bhandari, L. C. (1988). Debt /equity ratio and expected common stock returns: Empirical evidence. The Journal of Finance, 43(2): 507–528.
8
Carhart, M. M. (1997). On Persistence in Mutual Fund Performance. Journal of Finance, 52(1): 57–82.
9
Chan, K. C., Hamao, Y. & Lakonishok, J. (1991). Fundamentals and Stock Returns in Japan. Journal of Finance, 46 (5): 1739–1789.
10
Chen, N.F. & Reymond, K. (1989). Expected returns and the bid-ask spread. Working paper, University of Chicago.
11
Chordia, T., Roll, R. & Subrahmanyam, A. (2000). Commonality in liquidity. Journal of Financial Economics, 56(1): 3–28.
12
Chui, A. & Wei, K. C. (1998). Book-to-Market, Firm Size and the Turn-of-the-Year Effect: Evidence from Pacific–Basin Emerging Markets. Pacific-Basin Finance Journal, 6 (3/4): 275–293.
13
Datar, V., Naik, N. & Radcliffe, R. (1998). Liquidity and asset returns: an alternative test. Journal of Financial Markets, 1(2): 203-220.
14
Easley, D., Hvidkjaer, S. & O’Hara, M. (2004). Factoring information into returns. Working Paper. Cornell University.
15
Eslami Bidgholi, GH. & Khojasteh, M.A. (2008). Improving portfolio performance based on risk adjusted return in capital productivity oriented investments. Journal of financial research, 9(4): 3-21. (in Persian)
16
Fama, E.F. & French, K.R. (1993). Common Risk Factors in the Returns on Stocks and Bonds. Journal of Financial Economics, 33 (1): 3-56.
17
Fama, E. F. (1998). Market efficiency, long-term returns, and behavioral finance. Journal of Financial Economics, 49(3): 283-306.
18
Fama, E. F. & French, K.R. (1996). Multifactor Explanations of Asset Pricing Anomalies, Journal of Finance, 51(1): 55–84.
19
Forooghi, D., Frahmand, SH. & Ebrahimi, M. (2011). The relation between liquidity and performance of firms listed at Tehran Stock Exchange. Journal of Securities and Exchange, 4(15): 125-143. (in Persian)
20
Foster, K.R. & Kharazi, A. (2008). Contrarian and Momentum Returns on Iran's Tehran Stock Exchange. The Journal of International Financial Markets, Institutions & Money, 18(1): 16-30.
21
Ghalibaf Asl, H. & Eghbali, E. (2013). Examining liquidity premium and two-factor model in Tehran Stock Exchange. Quantitative studies in management, 4(4): 1-22. (in Persian)
22
Ghalibaf Asl, H. & Izadi, M. (2014). The relation between risk and return in Tehran Stock Exchange: momentum effect and liquidity risk. Monetary and Financial Economy, New series, 21(7): 84-104. (in Persian)
23
Ghalibaf Asl, H. & Karimi, M. (2012). Pricing of liquidity, size, value, and market risk premiums in Tehran Stock Exchange. Journal of Securities and Exchange, 5(17): 85-105. (in Persian)
24
Ghalibaf Asl, H., Shams, Sh. & Sadehvand, M. J. (2010). Examining the abnormal returns on price and earnings momentum in Tehran Stock Exchange. The Iranian Accounting and Auditing Review, 17(61): 99-116. (in Persian)
25
Hashemi, S. A., Qajavand, Z. & Qajavand, S. (2013). The effects of different levels of liquidity measures on stock returns premium using a four-factor model. Journal of Finance and asset management. 1(2): 69-86.
26
(in Persian)
27
Herrera, M. J. & Lockwood, L. J. (1994). The Size Effect in the Mexican Stock Market. Journal of Banking and Finance, 18(4): 621-632.
28
Huberman, G. & Halka, D. (2001). Systematic liquidity. Journal of Financial Research, 24(2): 161–178.
29
Hubinette, N. & Jonsson, G. (2011). An Alternative Four-Factor Model. Master Thesis in Finance Stockholm School of Economics.
30
Jaff, J., Keim, D. B. & Westerfied, R.(1989). Earnings Yields, Market Values, and Stock Returns. Journal of Finance, 44(1): 135-348.
31
Jegadeesh, N. & Titman, S. (1993). Returns to buying winners and selling losers: implications for stock market efficiency. Journal of Finance, 48(1): 65–91.
32
L’Her, J., Masmoudi, T. & Suret, J. (2004). Evidence to Support the Four-Factor Pricing Model from the Canadian Stock Market. Journal of International Financial Markets, Institutions and Money, 14(4): 313–328.
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Lam, K.S.K., Li, F.K. & & So, S.M.S. (2009). On the Validity of the Augmented Fama-French Four-Factor Model. University of Macau.
34
Lee, C., Swaminathan, B. (2000). Price momentum and trading volume. Journal of Finance, 55(5): 2017–2069.
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Liew, J. &Vassalou, M. (2000). Can Book-to-Market, Size and Momentum be Risk Factors that Predict Economic Growth? Journal of Financial Economics, 57(2): 221–245.
36
Liu, W. (2006). A liquidity augmented capital asset pricing model. Journal of Financial Economics, 82 (3): 631–671.
37
Lustig, H. (2001). The market price of aggregate risk and the wealth distribution. Unpublished working paper, University of Chicago (NBER).
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Mehrani, S. & Rasaeian, A. (2009). The relation between liquidity measures and annual stock returns in Tehran Stock Exchange. Journal of Accounting, 1(1):217-230. (in Persian)
39
Mojtahedzadeh, V. & Tarami, M. (2006). Examining Fama-French three- factor model in explaining stock returns in Tehran Stock Exchange. The message of Management. Nos. 17, 18: 109-132. (in Persian)
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Newey, W. & West, K. (1987). A simple, positive semi-definite heteroskedasticity and autocorrelation consistent covariance matrix. Econometrica, 55(3): 703–708.
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O’Brien, M., Brailsford, T. & Gaunt, C. (2010). Interaction of size, book-to-market and momentum effects in Australia. Accounting and Finance, 50(1): 197–219.
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Pastor, L. & Stambaugh, R. (2003). Liquidity risk and expected stock returns. Journal of Political Economy, 111(3): 642–685.
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Reinganum, M. R. (1981). Misspecification of Capital Asset Pricing: Empirical Anomalies based on Earnings’ Yields and Market Values. Journal of Financial Economics, 9(1): 19-46.
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45
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46
Rostami, M. & Rezaee Moqaddam, A. (2013). A survey of long-term return on IPOs using Fama-French model, liquidity and leverage. Management researches in Iran. 17(3): 113-127. (in Persian)
47
Sadeqi Sharif, S. J., Talaneh, A. & Askari Rad, H. (2013). Momentum Factor Effect on the Explanatory Power of Fama-French Three-Factor Model: Evidence from Tehran Stock Exchange. Journal of accounting knowledge, 4(12): 59-88. (in Persian)
48
Sadka, R. (2006). Momentum and post-earnings-announcement drift anomalies: The role of liquidity risk. Journal of Financial Economics, 80(2): 309–349.
49
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50
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51
ORIGINAL_ARTICLE
Managerial overconfidence and audit fees
Overconfidence or excessive self-confidence in general can be defined as a groundless belief about individual’s cognitive abilities, judgments and intuitive reasoning. If the auditor recognizes these personality traits in managers and estimates the financial reporting risk to be excessive due to managerial overconfidence, he/she could demand higher audit fees to compensate for the additional audit efforts needed to reduce detection risk. On the other hand, due to the confidence in their firms’ financial reporting process, the overconfident managers choose negotiation as a way to demand less scope and pay lower fees to the auditors. This study aimed to investigate the effect of managerial overconfidence on audit fees. The statistical population consisted of firms listed on the Tehran Stock Exchange during the years 2007 to 2013. The results indicated a significant negative relation between managerial overconfidence and audit fees. The additional studies showed that managerial overconfidence has no significant impact on using industry specialist auditors.
https://acctgrev.ut.ac.ir/article_55660_d9354eb5d084ba149768e160a3259794.pdf
2015-09-23
363
384
10.22059/acctgrev.2015.55660
Audit fees
audit risk
financial reporting and managerial overconfidence
industry specialist auditor
Yahya
Hasas Yeganeh
yahya_yeganeh@yahoo.com
1
Associate Professor of Accounting, Faculty of Accounting and Management, Allame Tabatabaei University, Tehran, Iran
AUTHOR
Masoud
Hasani Alghar
acc.hasani@gmail.com
2
Instructor of Accounting, Faculty of Humanities, Bozorgmehr University of Qaenat, Qaen, Iran
LEAD_AUTHOR
Mohammad
Marfou
marfoua@gmail.com
3
Assistant Professor of Accounting, Faculty of Accounting and Management, Allame Tabatabaei University, Tehran, Iran
AUTHOR
Ahmed, A.S. & Duellman, S. (2013). Managerial Overconfidence and Accounting Conservatism. Journal of Accounting Research, 51 (1): 1-30.
1
Arabsalehi, M. & Hashemi, M. (2015). The Effect of Managerial Overconfidence on Tax Avoidance. The Iranian Accounting and Auditing Review, 22(1): 85-104. (in Persian)
2
Ball, R., Jayaraman, S. & Shivakumar, L. (2012). Audited financial reporting and voluntary disclosure as complements: a test of the confirmation hypothesis. Journal of Accounting and Economics, 53 (1-2): 136-166.
3
Bedard, J.C. & Johnstone, K.M. (2004). Earnings manipulation risk, corporate governance risk, and auditors’ planning and pricing decisions. The Accounting Review, 79 (2): 277-304.
4
Ben-David, I. Graham, J. & Harvey, C. (2010). Managerial Miscalibration. National Bureau of Economic Research, Working Paper Series No. 16215. Available in: http://www.nber.org/papers/w16215.
5
Blankley, A.I., Hurtt, D.N. & MacGregor, J.E. (2012). Abnormal audit fees and restatements. Auditing: A Journal of Practice and Theory, 31 (1): 79-96.
6
Bouwman, C. (2014). Managerial Optimism and Earnings Smoothing. Journal of Banking & Finance, 41: 283-303.
7
Campbell, T. C., Gallmeyer, M., Johnson, S. A., Rutherford, J. & Stanley, B. W. (2011). CEO Optimism and Forced Turnover. Journal of Financial Economics, 101 (3): 695-712.
8
Charles, S., Glover, S. & Sharp, N. (2010). The association between financial reporting risk and audit fees before and after the historic events surrounding SOX. Journal of Financial Economics, 29 (1): 15-39.
9
Chen, S., Lai, S., Liu, C., McVay, S. (2014). Overconfident Managers and Internal Controls. Working paper, National Taiwan University and University of Washington.
10
Chyz, J., Gaertner, F., Kausar, A. & Watson, L. (2014). Overconfidence and Aggressive Corporate Tax Policy. Available at SSRN: http://ssrn.com/abstract=2408236.
11
Cohen, J., Gaynor, L.M., Krishnamoorthy, G. & Wright, A. (2011). The impact of auditor judgments of CEO influence on audit committee independence. Auditing: A Journal of Practice and Theory, 30 (4): 129-147.
12
COSO. (2013). Internal Control – Integrated Framework: Executive summary. www.coso.org. Darougheh Hazrati, F. & Pahlavan, Z. (2012). The Impact of the level of earning management and audit fees an evidence from ISE. Management Accounting, 15(4): 55-67. (in Persian)
13
Deshmukh, S., Goel, A. & Howe, K. (2013). CEO Overconfidence and Dividend Policy. Journal of Finance Intermediation, 22 (3): 440-463.
14
Dhaliwal, D., Lamoreaux, P., Lennox, C. & Mauler, L. (2014). Management influence on auditor selection and subsequent impairments of auditor independence during the post-SOX period. Contemporary Accounting Research, 32(2): 575-607.
15
Duellman, S., Hurwitz, H. & Sun, Y. (2015). Managerial Overconfidence and Audit Fees. Journal of Contemporary Accounting & Economics, 11(2): 148-165.
16
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17
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18
Hay, D.C., Knechel, W.R. & Wong, N. (2006). Audit fees: a meta-analysis of the effect of supply and demand attributes. Contemporary Accounting Research, 23 (1): 141-191.
19
Heaton, J. (2002). Managerial Optimism and Corporate Finance. Financial Management, 31(2): 33– 45.
20
Heidari, M. (2014). Examining Managerial Overconfidence Behavioral Explanation Effect on Cost Stickiness: Comparison with economic and Agency Theory Based Factors, Iranian Accounting and Auditing Review, 21(2): 151-172. (in Persian)
21
Hsieh, T., Bedard, J. C. & Johnstone, K. M. (2014). CEO Overconfidence and Earnings Management during Shifting Regulatory Regimes. Journal of Business Finance & Accounting, 41 (9-10): 1243-1268.
22
Johnson, E., Kuhn, J.R., Apostolu, B. & Hassell, J.M. (2013). Auditor perceptions of client narcissism as a fraud attitude risk factor. Auditing: A Journal of Practice and Theory, 32 (1): 203-219.
23
Kannan, Y., Skantz, T.R. & Higgs, J.L. (2014). The Impact of CEO and CFO Equity Incentives on Audit Scope and Perceived Risk as Revealed through Audit Fees. Auditing: A Journal of Practice and Theory, 33 (2): 111-139.
24
Kim, Y., Li, H. & Li, S. (2014). CEO Equity Incentives and Audit Fees. Contemporary Accounting Research, 32(2): 608-638.
25
Krishnan, G.V., Pevzner, M. & Sengupta, P. (2012). How do auditors view managers’ voluntary disclosure strategy? The effect of earnings guidance on audit fees. Journal of Accounting and Public Policy, 31 (5): 492-515. Malekian, E., Ahmadpour, A. & Talebtabar Ahangar, M. (2012). The Relationship between Some Corporate Governance, Audit Fees and Meter Ownership of Companies Listed in Tehran Stock Exchange, Journal of Financial Accounting Research, 4(14): 37-50. (in Persian)
26
Malmendier, U. & Tate, G. (2005). CEO Overconfidence and Corporate Investment. European Financial Management, 11 (5): 649-659.
27
Mashayekh, Sh. & Behzadpur, S. (2015). The Effect of Managers' Overconfidence on Dividend Policy in the Firms Listed in Tehran Stock Market, the Iranian Accounting and Auditing Review, 21(4): 485-504.
28
(in Persian)
29
Pompian, M. (2006). Behavioral Finance and Wealth Management, translated by: Ahmad Badri, Kayhan Publishing.
30
Presley, T.J. & Abbott, L.J. (2013). CEO Overconfidence and the Incidence of Financial Restatement. Advances in Accounting, 29 (1): 74-84.
31
Ramsheh, M. & Molanazari, M. (2014). Managerial Overconfidence and Accounting Conservatism, Journal of Accounting Knowledge, 5(16): 55-79. (in Persian)
32
Rashidi Baghi, M. (2015). Review Audit Fee Stickiness. Iranian Accounting and Auditing Review, 21(1): 431-448. (in Persian)
33
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34
Scherand, C.M. & Zechman, S.L. (2012). Executive Overconfidence and the Slippery Slope to Financial Misreporting. Journal of Accounting and Economics, 53(1-2): 311–329.
35
ORIGINAL_ARTICLE
Effect of diversification strategy on firm performance with application of entropy measure in Tehran Stock Exchange
Firm managers seek a way to improve their firm performance. One way is to use diversification strategy which creates range of business activities for the firms and leads to a better performance. This study examines the effect of diversification strategy on performance of 87 companies listed on Tehran Stock Exchange from 2010 to 2014. The main objective of this study is to investigate the non-liner relationship between diversification strategy and profitability of business units by sorting it into its related and unrelated components. In this study, multivariate linear regression model is used to test the hypotheses. The statistical method is Panel Data. The results showed that there is a curve-shaped relationship between diversification and profitability of business units; that is, profitability decreases at low levels of related diversification and increases at its high levels; also profitability increases at low levels of unrelated diversification and decreases at its high levels.
https://acctgrev.ut.ac.ir/article_55661_1c481d1ba7e4b2f736907571b196c5f3.pdf
2015-09-23
385
400
10.22059/acctgrev.2015.55661
Diversification strategy
entropy measure
related diversification
unrelated diversification
Farzaneh
Heidarpoor
fheidarpoor@yahoo.com
1
Associate Professor, Department of Accounting, Central Tehran Branch, Islamic Azad University, Tehran, Iran
LEAD_AUTHOR
Kimia
Alavi
kimia.alavi1366@gmail.com
2
M.A. in Accounting, Department of Accounting, Central Tehran Branch, Islamic Azad University, Tehran, Iran
AUTHOR
Abbasi, E. & Sedggi, AG. (2014). Exploring the Relationship between Disclosure Quality and the Performance of Tehran Stock Exchange Companies Using a Simultaneous Equations System. The Iranian Accounting and Auditing Review, 21(3): 371-376. (in Persian)
1
Bausch, A. & Pils, F. (2009).Product diversification strategy and financial performance: Meta-analytic evidence on causality and construct multidimensionality. Review of Managerial Science, 3 (3): 157–190.
2
Bowen, H. & Wiersema, M. (2005).Foreign based competition and corporate diversification strategy. Strategic Management Journal, 26 (12): 1153–1171.
3
Chen, Ch. & Yu, CH. (2012). Managerial ownership, diversification and firm performance: Evidence from an emerging market. Business Review, 21(3): 518-534.
4
Classification of Iran’s economic activities. Retrieved 2014, May. 15 from www.amar.org.ir/Portals/0/faradade/tabaghebandi/ISIC.4-2008.pdf.
5
Datta, D., Rajagopalan, N. & Rasheed, A. (1991). Diversification and performance: Critical review and future directions. Journal of Management Studies, 28 (5): 529–558.
6
Hall, E. (1995). Corporate diversification and performance: An investigation of causality. Australian Journal of Management, 20(1): 25-42.
7
Jacquemin, A. & Berry, C. (1979). Entropy measure of diversification and corporate growth. The Journal of Industrial Economics, 27 (4): 359–369.
8
Knecht, M. (2013). Diversification, industry dynamism and economic performance. Wiesbaden, Germany, Gabler.
9
La Rocca, M. & La Rocca, T. & Gerace, D. & Smark, C. (2009). Effect of diversification on capital structure. Accounting and Finance, 49(4): 799-826.
10
Lien, Y. & Li, SH. (2013). Does diversification add firm value in emerging economies? Effect of Corporate Governance. Journal of Business Research, 66(12): 2425-2430.
11
Mahdavi, GH., Behpour, S. & Kazemnezhad, F. (2010).Effect of Efficiency of Intellectual Capital Elements on Corporate Financial Performance in Tehran Stock Exchange. The Iranian Accounting and Auditing Review, 17(60): 57-74. (in Persian)
12
Namazi, M., Hallaj, M. & Ebrahimi, SH. (2011). The Impact of Institutional Ownership on Past and Future Financial Performance of companies listed in Tehran Stock Exchange. The Iranian Accounting and Auditing Review, 16(58): 113-130. (in Persian)
13
Palich, L., Cardinal, L. & Miller, C. (2000). Curvilinearity in the diversification performance linkage: An examination of over three decades of research. Strategic Management Journal, 21 (2): 155–174.
14
Park, K. & Jang, S. (2012). Effects of diversification on firm performance: Application of the entropy measure. International Journal of Hospitality Management, 31(1): 218-228.
15
Park, K & Jang, S. (2013). Effects of within-industry diversification and related diversification strategies on firm performance. International Journal of Hospitality Management, 34: 51-60.
16
Qian, G. & Lee, L. (2008). Regional diversification and firm performance. Journal of International Business Studies, 39 (2): 197-214.
17
Ramanujam, V. & Varadarajan, P. (1989). Research on corporate diversification: A Synthesis. Strategic Management Journal, 10(6): 523-551.
18
Tehrani, R. (2007). Fundamentals of Managerial Finance. Tehran: Negahe Danesh. (in Persian)
19
Tehrani, R., Babaee Zakilaki, M. & Karimi, K. (2008). The effect of diversification strategy on the financial performance of the manufacturing companies of Tehran Securities Bourse. Journal of Financial Research, 25(4): 21-40.
20
(in Persian)
21
Tehrani, R. & Vahed Ahmadian, H. (2006). Examine the relationship between diversification, risk and return: Case of Tehran Stock Exchange. Quarterly Iranian Journal of Trade Studies, 38: 187-212. (in Persian)
22
Zhou, Y. (2011). Synergy, coordination costs, and diversification choices. Strategic Management Journal, 32 (6): 624–639.
23
ORIGINAL_ARTICLE
Time variation in the marginal value and marginal rate of firms’ cash holdings in the Tehran Stock Exchange (TSE)
The main purpose of the present research is to investigate time variation in the marginal value and marginal rate of Firms’ Cash Holdings in the Tehran Stock Exchange. The study period is between 1388 and 1392 and the statistical sample of the study is 101 companies listed on Tehran Stock Exchange (TSE). We use Panel-Data Regression and EGLS method to estimate the model parameters. The results of this study reveal that marginal value of cash is less than its face value and marginal rate of cash holding is a decreasing rate. Finally, the findings show that marginal value of cash varies over time.
https://acctgrev.ut.ac.ir/article_55662_7c7726baff507acf6e43097941d780fb.pdf
2015-09-23
401
419
10.22059/acctgrev.2015.55662
Cash Holdings
marginal rate
marginal value
Mehdi
Meshki Miavaghi
mhd.meshki@yahoo.com
1
Assistant Professor, Payam Noor University, Rasht, Iran
LEAD_AUTHOR
Mahyar
Sanyeei
m.sanayeei@yahoo.com
2
MSc. in Business Administration, Azad University, Rasht, Iran
AUTHOR
Bates, T., Chang, C. & Chi, J. (2011). Why has the value of cash increased over time? Working paper, SSRN: http:// ssrn.com.
1
Beshkooh, M. & Jahangiri, A. (2013). The Effect of Free Cash Flow Agency Problem on Value Relevance of Earnings and Book value. Quarterly Journal The Iranian Accounting And Auditing Review, 20 (1): 35-52. (in Persian)
2
Bulu, G., Babajani, J. & Maleki, B. M. (2012). Relationship between Non-optimal Cash Holdings and Future Performance of Companies in Tehran Stock Exchange (TSE). Journal of Accounting Knowledge, 3(11): 7-29.
3
Clarkson, G., Jacobsen, T. E. & Batcheller, A. L. (2007). Information asymmetry and information sharing. Government Information quarterly, 24(4): 827-839.
4
Dittmar, A., Mahrt-Smith, J. & Servaes, H. (2003). International Corporate Goverance and Corporate Cash Holdings, Journal of Financial and Quantitative Analysis, 38(1):111-133.
5
Fakhari, H. & Taghavi, R. (2009). Accruals Quality and Corporate Cash Holdings. Quarterly Journal The Iranian Accounting And Auditing Review, 16 (57): 69-84. (in Persian)
6
Faulkender, M. & Wang, R. (2006). Corporate financial policy and the value of cash. Journal of Finance, 4(61): 127-151.
7
Ferreira, M. A. & Vilela, A. (2004). Why do firms hold cach? Evidence from EMU Countries. European Financial Management, 10(2): 295-319.
8
Guney, Y., Ozkan, A. & Ozkan, N. (2009). International evidence on the non - linear impact of leverage on corporate cash holding. Journal of multinational financial management, 17(1): 45-60.
9
Kamyabi, Y., Nikravan, B. & Salmani, R. (2014). The relationship between cash flow volatility and cash flow sensitivity of cash with dividend policy in Tehran stock exchange. Quarterly Journal The Iranian Accounting And Auditing Review, 21(2): 211-228. ( in Persian)
10
Mehrani. K. & Hesarzadeh, R. (2009). Accounting Quality and Corporate Cash Holdings. Quarterly Journal of Securities Exchange, 2(5):105-127.
11
Mikkelson, W. & Partch, M. (2003). Do persistent large cash reserves hinder performance. Journal of Financial and Quantitative Analysis, 38(3): 275-294.
12
Oler, D. & Picconi, M. (2009). Implication of insufficient and excess cash for future performance. Working paper. Indiana University.
13
Ozkan, A. (2004). Corporate cash holding. An empirical investigation of UK companies. Journal of banking& finance, 28(9): 2103-2134.
14
Palazzo, D. (2011). Cash holdings, risk, and expected returns. Journal of Financial Economics, 104(1): 162–185.
15
Pinkowitz, L. & Williamson, R. (2004). What is a dollar worth? The market value of Cash holding faculty. Availble at URL: http://www.ssrn.com/sol3/papers. cfm?abstract_id=355840&download.
16
Sepasi, S. & Khamslouie, M. (2013). Asymmetric Cash Flow Sensitivity of Cash Holdings. Quarterly Journal The Iranian Accounting And Auditing Review, 20 (4): 61-76. (in Persian)
17
Subramaniam, V., Tony, T., Heng,Y. & Xin, Z. (2011). Firm structure and corprorate cash holding. Journal of Corporate Finance, 17(1): 759-773.
18
Titman, S. & Wessels, R. (1988). The Determinants of Capital Structure Choice. Journal of Finance, 43(1): 1- 19.
19