Univrsity Of Tehran PressAccounting and Auditing Review2645-802025220180622The Impact of Political Connections on Overinvestment and Firm PerformanceThe Impact of Political Connections on Overinvestment and Firm Performance1811986755110.22059/acctgrev.2018.252255.1007834FAYounesBadavar NahandiAssociate Prof., Dep. of Accounting, Tabriz Branch, Islamic Azad University, Tabriz, IranVahidTaghizadeh KhanqahPh.D. Student of Accounting, Tabriz Branch, Islamic Azad University, Tabriz, IranJournal Article20180209<strong>Objective:</strong> Overinvestment is a type of investment behavior that results from greater access to free cash flows. Usually, access to external resources is more in companies with strong political connections. Thus managers may influence the firm's performance by making decisions. Hence, the purpose of the present research is to investigate the effect of political connections on overinvestment and performance of the listed companies in the Tehran Stock Exchange.
<strong>Methods:</strong> To achieve research goal 110 companies were selected and studied for the period of 2010-2016. A panel data approach was used to test the research of hypotheses.
<strong>Results:</strong> The results show that political connections on overinvestment and firm performance has a positive and negative effect respectively.
<strong>Conclusion:</strong> In fact, although political connections help firms obtain more financial resources, access to commercial loans derived from political connections could lead to oversupply of credit and increase financial burden. In addition, intervention from politicians may cause distortions in social resources allocation, which results in overinvestments and poor performance.<strong>Objective:</strong> Overinvestment is a type of investment behavior that results from greater access to free cash flows. Usually, access to external resources is more in companies with strong political connections. Thus managers may influence the firm's performance by making decisions. Hence, the purpose of the present research is to investigate the effect of political connections on overinvestment and performance of the listed companies in the Tehran Stock Exchange.
<strong>Methods:</strong> To achieve research goal 110 companies were selected and studied for the period of 2010-2016. A panel data approach was used to test the research of hypotheses.
<strong>Results:</strong> The results show that political connections on overinvestment and firm performance has a positive and negative effect respectively.
<strong>Conclusion:</strong> In fact, although political connections help firms obtain more financial resources, access to commercial loans derived from political connections could lead to oversupply of credit and increase financial burden. In addition, intervention from politicians may cause distortions in social resources allocation, which results in overinvestments and poor performance.https://acctgrev.ut.ac.ir/article_67551_789cd94b7b0ad1a7e930880d346a7d06.pdfUnivrsity Of Tehran PressAccounting and Auditing Review2645-802025220180622CEO Over-confidence and Corporate Cash Holdings: Emphasizing the Moderating Role of Audit QualityCEO Over-confidence and Corporate Cash Holdings: Emphasizing the Moderating Role of Audit Quality1992146755210.22059/acctgrev.2018.251004.1007820FANargesSarlakAssociate Prof. of Accounting, University of Qom, Qom, IranOmidFarajiAssistant Prof. of Accounting, Faculty of Management and Accounting, Farabi Campus, University of Tehran, Qom IranMostafaEzadpourPhD. of Accounting, University of Qom, Qom, IranZahraJoudaki ChegeniMs. of Accounting, University of Qom, Qom, IranJournal Article20180123<strong>Objective:</strong> Since cash has a pivotal role in going concern, financial flexibility and utilizing investment opportunities, managers have sufficient motivation to hold cash. The existence of an overconfidence attribute in managers leads to an over-estimation of their knowledge and their ability to generate future cash flows. This process can affect their decision on investing in projects and amount of cash holdings; on the other hand, audit quality is an effective mechanism for controlling managerial decisions and issues related to investment plans. Hence, the main purpose of this study is to investigate the effect of audit quality on the relationship of CEO overconfidence and cash holdings.
<strong>Methods:</strong> Hypotheses have been investigated using a sample of 170 companies listed in the Tehran Stock Exchange during the period 2012-2016 and multiple regression equations of integrated data method.
<strong>Findings: </strong>The authors find that there is a negative relationship between managers' overconfidence and cash holdings. Further, audit quality audits do not reduce the intensity of the negative relationship between managers' overconfidence and cash holdings.
<strong>Conclusion:</strong> Based on the results, overconfidence managers are less willing to cash holding, because of their excessive self-reliance and ignoring demand for cash. In addition, contrary to theoretical foundations of research, audit quality does not affect the relationship between overconfidence and cash holdings. This can be due to Inappropriate of audit quality measurement metrics in Iran and ineffectiveness of audit quality in preventing of behavior managers overconfidence.
<strong>Objective:</strong> Since cash has a pivotal role in going concern, financial flexibility and utilizing investment opportunities, managers have sufficient motivation to hold cash. The existence of an overconfidence attribute in managers leads to an over-estimation of their knowledge and their ability to generate future cash flows. This process can affect their decision on investing in projects and amount of cash holdings; on the other hand, audit quality is an effective mechanism for controlling managerial decisions and issues related to investment plans. Hence, the main purpose of this study is to investigate the effect of audit quality on the relationship of CEO overconfidence and cash holdings.
<strong>Methods:</strong> Hypotheses have been investigated using a sample of 170 companies listed in the Tehran Stock Exchange during the period 2012-2016 and multiple regression equations of integrated data method.
<strong>Findings: </strong>The authors find that there is a negative relationship between managers' overconfidence and cash holdings. Further, audit quality audits do not reduce the intensity of the negative relationship between managers' overconfidence and cash holdings.
<strong>Conclusion:</strong> Based on the results, overconfidence managers are less willing to cash holding, because of their excessive self-reliance and ignoring demand for cash. In addition, contrary to theoretical foundations of research, audit quality does not affect the relationship between overconfidence and cash holdings. This can be due to Inappropriate of audit quality measurement metrics in Iran and ineffectiveness of audit quality in preventing of behavior managers overconfidence.
https://acctgrev.ut.ac.ir/article_67552_36309e16d8cbfe8069930da05318f3e4.pdfUnivrsity Of Tehran PressAccounting and Auditing Review2645-802025220180622Investigating the Effect of Customer Concentration on Tax Avoidance, Considering Firm's Market ShareInvestigating the Effect of Customer Concentration on Tax Avoidance, Considering Firm's Market Share2152326755910.22059/acctgrev.2018.239298.1007667FAAbbasSheybani TezerjiPh.D Student of Accounting, Dep. of Accounting, Kerman Branch, Islamic Azad University, Kerman, IranAhmadKhodamipourAssociate Prof. of Accounting, Faculty of Economics and Management, University of Shahid Bahonar, Kerman, IranOmidPourheidariProf. of Accounting, Faculty of Economics and Management, University of Shahid Bahonar, Kerman, IranJournal Article20170806<strong>Objective:</strong> The aim of this study is to investigate the effect of customer concentration on tax avoidance considering the firm's market share.
<strong>Methods:</strong> Tax avoidance measure is the difference between legal and actual tax rates of a company. The sample of this study consists of 79 firms listed in the Tehran Stock Exchange for the period from 2006 to 2015. Data has been examined using regression analysis.
<strong>Results:</strong> The results indicat that customer concentration had a significant positive impact on the activities of tax avoidance. In addition, positive relationship between customer concentration and tax avoidance is more pronounced when a firm has a lower market share in its industry<strong><em>.</em></strong>
<strong>Conclusion:</strong> Level of customer concentration affects a firm’s operating performance, cash flow risk, and financial policies, hence one expect that it also affects the extent to which the firm engages in tax avoidance. Corporate customer concentration leads to demand for more cash holdings and less financial volatility. Since tax planning can increase both cash flow and accounting earnings, firms with a concentrated customer base may be more likely to engage in tax avoidance.
<strong>Objective:</strong> The aim of this study is to investigate the effect of customer concentration on tax avoidance considering the firm's market share.
<strong>Methods:</strong> Tax avoidance measure is the difference between legal and actual tax rates of a company. The sample of this study consists of 79 firms listed in the Tehran Stock Exchange for the period from 2006 to 2015. Data has been examined using regression analysis.
<strong>Results:</strong> The results indicat that customer concentration had a significant positive impact on the activities of tax avoidance. In addition, positive relationship between customer concentration and tax avoidance is more pronounced when a firm has a lower market share in its industry<strong><em>.</em></strong>
<strong>Conclusion:</strong> Level of customer concentration affects a firm’s operating performance, cash flow risk, and financial policies, hence one expect that it also affects the extent to which the firm engages in tax avoidance. Corporate customer concentration leads to demand for more cash holdings and less financial volatility. Since tax planning can increase both cash flow and accounting earnings, firms with a concentrated customer base may be more likely to engage in tax avoidance.
https://acctgrev.ut.ac.ir/article_67559_4f21794881b66c59b205bf65299dc767.pdfUnivrsity Of Tehran PressAccounting and Auditing Review2645-802025220180622A Study of the Role of Social and Professional Ties of Audit Committee with the Assessment of Firm Fraudulent ReportingA Study of the Role of Social and Professional Ties of Audit Committee with the Assessment of Firm Fraudulent Reporting2332506756110.22059/acctgrev.2018.259834.1007911FAHosseinFakhariAssociate Prof. of Accounting, University of Mazandaran, Babolsar, IranHosseinRajabdorriPh.D. Student in Accounting, Bandar Abbas Branch, Islamic Azad University, Bandar Abbas, IranAmirrezaKhanizalanPh.D. Student in Accounting, Bandar Abbas Branch, Islamic Azad University, Bandar Abbas, IranJournal Article20180609<strong>Objective:</strong> This research study the role of social and professional ties of audit committee in assessment of the firm fraudulent reporting.
<strong>Methods:</strong> The study is an applied-type survey. A questionnaire and simple random sampling of 102 members of Audit Committee of the Tehran Stock Exchange in 2017 were carried out. To analyze the findings Structural Equation Method was used.
<strong>Results:</strong> The findings of the study show that there is a negative and significant relationship between social and professional relations of the members of the audit committee with senior executives and actions of members of audit committee to evaluate the fraudulent financial reporting risk. Also, there is a positive and significant relationship between the social and professional relations of the members of the audit committee with other managers and the audit committee's efforts to assess the fraudulent financial reporting risk.
<strong>Conclusion:</strong> These findings show how the level of social and professional ties between members of the Audit Committee and managers can be effective in an assessment of the firm fraudulent reporting.<strong>Objective:</strong> This research study the role of social and professional ties of audit committee in assessment of the firm fraudulent reporting.
<strong>Methods:</strong> The study is an applied-type survey. A questionnaire and simple random sampling of 102 members of Audit Committee of the Tehran Stock Exchange in 2017 were carried out. To analyze the findings Structural Equation Method was used.
<strong>Results:</strong> The findings of the study show that there is a negative and significant relationship between social and professional relations of the members of the audit committee with senior executives and actions of members of audit committee to evaluate the fraudulent financial reporting risk. Also, there is a positive and significant relationship between the social and professional relations of the members of the audit committee with other managers and the audit committee's efforts to assess the fraudulent financial reporting risk.
<strong>Conclusion:</strong> These findings show how the level of social and professional ties between members of the Audit Committee and managers can be effective in an assessment of the firm fraudulent reporting.https://acctgrev.ut.ac.ir/article_67561_37b072a90f531c61ce4a6a8b7d5346a8.pdfUnivrsity Of Tehran PressAccounting and Auditing Review2645-802025220180622Impact of Financial Constraint on Stock Price Crash Risk with an Emphasis on Discretionary AccrualsImpact of Financial Constraint on Stock Price Crash Risk with an Emphasis on Discretionary Accruals2512686756310.22059/acctgrev.2018.239965.1007678FAHeydarMohammadzade SaltehAssociate Prof. of Accounting, Marand Branch, Islamic Azad University, Marand, IranEisaAbyaziPh.D. Student of Accounting, Marand Branch, Islamic Azad University, Marand, IranJournal Article20170817<strong>Objective:</strong> The purpose of this study is to investigate the effect of financial constraint on stock price crash risk with an emphasis on discretionary accruals in listed companies in the Tehran Stock Exchange.
<strong>Methods: </strong>In this regard, 110 companies were selected for the period of 2010-2016. A panel data approach has been used to test of research hypotheses.
<strong>Results:</strong> The results show that financial constraints affect stock price crash risk. This means that financial constraints related to stock price crash risk with bad news hording and eventually stock price crash risk. Also, the sample companies were divided into groups of companies with discretionary accruals, up and down. Finally, the results show that positive impact of financial constraints on stock price crash risk is higher in companies with high accruals.
<strong>Conclusion: </strong>According to the findings, the results are consistent with the agency theory.
<strong>Objective:</strong> The purpose of this study is to investigate the effect of financial constraint on stock price crash risk with an emphasis on discretionary accruals in listed companies in the Tehran Stock Exchange.
<strong>Methods: </strong>In this regard, 110 companies were selected for the period of 2010-2016. A panel data approach has been used to test of research hypotheses.
<strong>Results:</strong> The results show that financial constraints affect stock price crash risk. This means that financial constraints related to stock price crash risk with bad news hording and eventually stock price crash risk. Also, the sample companies were divided into groups of companies with discretionary accruals, up and down. Finally, the results show that positive impact of financial constraints on stock price crash risk is higher in companies with high accruals.
<strong>Conclusion: </strong>According to the findings, the results are consistent with the agency theory.
https://acctgrev.ut.ac.ir/article_67563_374e7c38457ecfce4a39df539e330113.pdfUnivrsity Of Tehran PressAccounting and Auditing Review2645-802025220180622Social Capital and Audit FeesSocial Capital and Audit Fees2692886756510.22059/acctgrev.2018.237539.1007649FAMohammadrezaMehrabanpourAssistant Prof. of Accounting, Faculty of Management and Accounting, Farabi Campus of Tehran University, Qom, IranMohammadJandaghi GhomiPh.D. Student of Accounting, Farabi Campus of Tehran University, Qom, IranMohammad AliRajabbeykiPh.D. Student of Accounting, Farabi Campus of Tehran University, Qom, IranJournal Article20170711<strong>Objective</strong>: The purpose of this research is to identify the effect of social capital on audit fees. As an emerging form of economic capital, social capital leads to mutual trust and beneficial partnerships in business environment and thereby driving economic behaviors toward collective well-being. In a capital market, audit fees are affected by client's risk and thus it can be an indicator of the effectiveness of the trust of social capital in the business environment. In this regard, the present study investigates the effect of the client's social capital on audit fees.
<strong>Methods</strong>: Social capital indicators in this study include cognitive (including religiosity, family values, collectivism), and structural variables (including relationships with other companies and relationships with the government). The research sample includes 119 Tehran Stock Exchange (TSE) firms during the period from 2009 to 2017, and a multi-variable regression is used for hypothesis testing on a panel data set.
<strong>Results</strong>: The results show a negative and significant effect of social capital due to religiosity, collectivism and relations with other companies on the audit fees. However, there are not any significant effect about the social capital of family values and governmental relationship.
<strong>Conclusion</strong>: Social capital by creation of the trust, tendency to cooperate and formation of collective actions for achieving social and economic synergies has led to economic behaviors toward collective goals and interests and makes the avoidance of opportunistic behaviors in business and so it significantly contributes to a reduction in audit fees.<strong>Objective</strong>: The purpose of this research is to identify the effect of social capital on audit fees. As an emerging form of economic capital, social capital leads to mutual trust and beneficial partnerships in business environment and thereby driving economic behaviors toward collective well-being. In a capital market, audit fees are affected by client's risk and thus it can be an indicator of the effectiveness of the trust of social capital in the business environment. In this regard, the present study investigates the effect of the client's social capital on audit fees.
<strong>Methods</strong>: Social capital indicators in this study include cognitive (including religiosity, family values, collectivism), and structural variables (including relationships with other companies and relationships with the government). The research sample includes 119 Tehran Stock Exchange (TSE) firms during the period from 2009 to 2017, and a multi-variable regression is used for hypothesis testing on a panel data set.
<strong>Results</strong>: The results show a negative and significant effect of social capital due to religiosity, collectivism and relations with other companies on the audit fees. However, there are not any significant effect about the social capital of family values and governmental relationship.
<strong>Conclusion</strong>: Social capital by creation of the trust, tendency to cooperate and formation of collective actions for achieving social and economic synergies has led to economic behaviors toward collective goals and interests and makes the avoidance of opportunistic behaviors in business and so it significantly contributes to a reduction in audit fees.https://acctgrev.ut.ac.ir/article_67565_a2a032edb98b30c13c76ecbb04df8ef0.pdfUnivrsity Of Tehran PressAccounting and Auditing Review2645-802025220180622Effects of Innovations and Moderating Role of Corporate Social Responsibility on the Financial Performance of the Firms Listed on the Tehran Stock Exchange in Different IndustriesEffects of Innovations and Moderating Role of Corporate Social Responsibility on the Financial Performance of the Firms Listed on the Tehran Stock Exchange in Different Industries2893106756610.22059/acctgrev.2018.255023.1007870FAMohammadNamaziProf. of Accounting, Faculty of Social Sciences, Economics and Management Shiraz University, Shiraz, IranFatemehMoghimiMSc. of Accounting, Faculty of Social Sciences, Economics and Management Shiraz University, Shiraz, IranJournal Article20180325<strong>Objective:</strong> Innovation would enable companies to respond to competition and environmental changes, and by obtaining new capabilities, they would access to superior financial performance. The main objective of this research is to determine the impact of innovation and the moderating role of social responsibility on relationship between innovation and financial performance of companies in various industries. <br /><strong>Methods:</strong> The population of the study consisted of 184 active firms (1840 firm –year) listed in the Tehran Stock Exchange from 2007 to 2016. In order to investigate the effect of variables, the structural equation method and for analysis of patterns, a partial least squares (PLS-SEM) approach were used. <br /><strong>Results:</strong> The results of the first hypothesis test show that in the Tehran Stock Exchange, innovation in automotive industry, tools and machinery, and pharmaceutical, chemical, and plastic industries posit a greater impact on financial performance than other industries. Innovative organizations have a superior financial performance. The results of the second hypothesis test indicate that direct and positive impact of social responsibility on financial performance of the company is significant. Social responsibility in the pharmaceutical, chemical, rubber and tile industries, cement, lime, plaster, and other industries show a greater impact on the financial performance of companies. As social responsibilities increase, companies' performance will also improve. <br /><strong>Conclusion:</strong> The results of the third hypothesis test indicated that there is a significant relationship between innovation and financial performance of the company in all industries when social responsibility is used as a moderating variable. But its impact on the automotive industry, machine parts, pharmaceuticals, chemicals and plastics, as well as the tile industry, cement, lime and plaster is more than other industries. In this case, the power of the model increases in all industries.<strong>Objective:</strong> Innovation would enable companies to respond to competition and environmental changes, and by obtaining new capabilities, they would access to superior financial performance. The main objective of this research is to determine the impact of innovation and the moderating role of social responsibility on relationship between innovation and financial performance of companies in various industries. <br /><strong>Methods:</strong> The population of the study consisted of 184 active firms (1840 firm –year) listed in the Tehran Stock Exchange from 2007 to 2016. In order to investigate the effect of variables, the structural equation method and for analysis of patterns, a partial least squares (PLS-SEM) approach were used. <br /><strong>Results:</strong> The results of the first hypothesis test show that in the Tehran Stock Exchange, innovation in automotive industry, tools and machinery, and pharmaceutical, chemical, and plastic industries posit a greater impact on financial performance than other industries. Innovative organizations have a superior financial performance. The results of the second hypothesis test indicate that direct and positive impact of social responsibility on financial performance of the company is significant. Social responsibility in the pharmaceutical, chemical, rubber and tile industries, cement, lime, plaster, and other industries show a greater impact on the financial performance of companies. As social responsibilities increase, companies' performance will also improve. <br /><strong>Conclusion:</strong> The results of the third hypothesis test indicated that there is a significant relationship between innovation and financial performance of the company in all industries when social responsibility is used as a moderating variable. But its impact on the automotive industry, machine parts, pharmaceuticals, chemicals and plastics, as well as the tile industry, cement, lime and plaster is more than other industries. In this case, the power of the model increases in all industries.https://acctgrev.ut.ac.ir/article_67566_c710e773ceb9b8a252e71a8b67e42b7b.pdf