Ethics in Management Accounting: Moving toward Ethical Motivation

In today’s business environment, the role of accountants is significant. Managers and other decision makers base their decisions mainly on information that accountants provide. Since accuracy of decisions depends on the reliability of accounting information, the ethical dimension of the profession has gained considerable attention recently. In fact, management accountants are required to make ethical choices in many settings. Base on the Rest’s model that is an ethical decision making’s model, 4 inner psychological processes (ethical sensitivity, judgment, motivation and character) together give rise to outwardly observable behavior. Professional organizations like IMA[1] support management accountants in recognizing and solving specific situations or dilemmas which management accountants may encounter by preparing codes of ethics and teaching them. But, ethics education solely does not lead to a success in the emergence of ethical behavior. An individual’s willingness and motivation has been recognized as a crucial factor in engaging in ethical decision making. With regard to the importance and position of motivation in ethical decisions it requires to special attention, nonetheless most of the studies have been concentrated on two first dimensions, ethical sensitivity and judgment. Therefore, this paper is intended to recognize some of important and influential factors on ethical motivation of management accountants and to explain the relations between these factors and also relationship between these factors with the motivation in rest’ model. It’s noticeable that organizations have a critical and basic role in ethical motivation of their own employees. finally, in order to ethical motivation of management accountants, guidelines will be presented that implementing and performing these recommendations by organizations can result in motivation and consequently ethical intention of management accountants. Keywords: Management accounting, Ethical decisions, Rest’ model, Ethical motivation [1] Institute of Management Accountant

An investigation of the Relationship between the Audit Quality and the Cost of Equity with Sustainable Profits

One of the items of financial statements that is considered as the evaluation criterion to performance and profitability of the profit unit is income reporting. However, calculating the net profit per unit is affected by accounting methods and estimates. Accordingly, the objective of the present research is to study the relationship between the audit quality (the audit office and the auditor tenure) and the cost of equity with sustainable profits in the companies listed on the Tehran Stock Exchange. For that, three hypotheses were formulated to address this issue and the data related to 127 member companies on the Tehran Stock Exchange were analyzed from 2010 to 2014. The regression model of the research was studied and tested through the panel data approach with fixed effects. The auditor tenure and the size of audit firm and the cost of equity are the dependent variables of research. The research method is descriptive- survey and in terms of objective and with regard to the occurrence, it is a post-incident study. The research results suggest a positive and significant relationship between the audit tenure and the audit office and the cost of equity with sustainable profits. Increasing the audit quality with regard to its impact on increasing the transparency reporting would lead to the reduction of uncertainty and information asymmetry in connection with the companies' stock and this leads to an increase in sustainable profits. Keywords: audit tenure, audit office, cost of equity, sustainable profits JEL Classifications: C32; O13; O4

The trend of relevance of value of accounting information: a study on pharmaceutical companies listed in the Tehran Stock Exchange

Background: Financial statements are one of the main ways for companies to communicate in order to provide financial and non-financial information to their stakeholders. The purpose of this research was to investigate the relevance of accounting information value. It was for pharmaceutical companies active in Tehran Stock Exchange. Methods: This descriptive-correlational study was conducted on 26 pharmaceutical companies admitted to the stock exchange during the period of 2000 to 2019. The method of collecting information was based on two library models and the information included in the financial statements of the companies. To estimate the value relevance of accounting information in this study, the non-parametric method of classification and regression tree (CART) was used, which automatically includes non-linear relationships and interactions between variables, and simple linear regression was used to test the trend of value relevance. Results: The results showed that the trend of relevance of the composite value of accounting information increased during the research period for pharmaceutical companies, but it was not statistically significant. The results of the relevance of the value of single variables show a decrease in the relevance of the value of known intangible assets, which includes goodwill and software, and an increase in the relevance of the value of alternative performance measures for pharmaceutical companies. Conclusion: The relevance of the accounting information value of pharmaceutical companies allows investors to easily adjust their investment strategies in the Bahadra Stock Exchange and make informed decisions to achieve their goals and allocate resources to more profitable investments

Study of Commitment Items Quality Members Effect on Price Synchronism in Tehran Stock Exchange

Accounting profit always as an exhibited item in financial statements has been considered by investors whom are attended as the most significant users of financial statements, so profit is a basis for the most economical decisions. In the research, effect of committing item quality members with price synchronism (a criterion to measure the proportional amount of corporating special information, which has been reflected in price) has been investigated in accepted corporations in Tehran stock exchange. In research, committing item quality members are independent variables and price synchronism is dependent variable. Price synchronism is an amplitude which shows industry and market returns and stock return differences in corporation level. The research is application based on its aim, is measuring and describing based on its performance and is one of the best. 127 corporations from 2010 to 2014 have been chosen by systematic deletion. To test research hypotheses panel data method and fixed effect method have been used. Research conclusions show that there is no relationship between involuntary commitment items qualities with price synchronism, but there is a meaningful direct effect between voluntary committing items with price synchronism for accepted corporations in Tehran stock exchange. Keywords: Commitment Items Quality, Involuntary Commitment Items Quality, Price Synchronism JEL Classifications: E37, E32, C53, C

Study of Information Asymmetry Effect on Price Synchronism in Tehran Stock Exchange

Accounting profit always as an exhibited item in financial statements has been considered by investors whom are attended as the most significant users of financial statements, so profit is a basis for the most economical decisions. In the research, the effect of information asymmetry with price synchronism (a criterion to measure the proportional amount of corporate special information, which has been reflected in price) have been investigated in accepted corporations in Tehran stock exchange. In research information asymmetry is independent variable and price synchronicity is dependent variable. Price Synchronism is an amplitude which shows industry and market returns and stock return differs in corporation level. The research is an applied research based on its aim, is measuring and describing based on its performance and is one of the best. 127 corporations from 2010 to 2014 have been chosen by systematic deletion. To test research hypotheses Panel Data method and Fixed Effect method have been used. Research conclusions show that there is no relationship between information asymmetry with price synchronism. Keywords: Commitment Items Quality, Information Asymmetry, Price Synchronism JEL Classifications: C53, C5, E37, E3

Correlation between Financial Leverage and Firm Value in Companies Listed in the Tehran Stock Exchange: A Case Study

The financial lever is a norm in measuring the scale of using debt in the firm's capital structure. One of the most important issues in financial discussions is obtaining a blend of capital structure which has the most attractions for the investors. The structure of capital is a required link between debt and the equity that provides financial needs for preparing the company's properties. The capital structure as the most important parameter in evaluating companies has been stated. In addition, the aim of determining the capital structure is to identify an ideal combination of financial sources in each company, in order to increase the shareholders’ wealth. Choosing an ideal capital's structure leads to a decrease in the company’s expenses and an increase in its value in the market. This research belongs to the descriptive (quasi-experimental) researches and its plan is classified as post-event ones. The hypotheses in this research have been tested through the statistical methods of correlation analysis. Based on the results of this research, there is a negative significant correlation between the financial leverage and other variables as earnings per share, price earnings ratio, return on equity, return on asset and operation profit in 153 accepted companies in Tehran Stocking Market in a five year period between the years (2005) to (2010) have been confirmed. According to the correlations between these variables, it will be suggested for the shareholders to involve the mentioned variables in their financial decisions in order to make an ideal structure; and the managers do possible investments, through decreasing the proportion of debts, for increasing the value of their company. They also need to make shareholders closer to choose influential and possible resources for their wealth to be increased by the use of strategic planning. Keywords: Financial Leverage, Firm value, Earnings per share, Return on equity, Return on asse

Environmental disclosure quality and risk: the moderating effect of corporate governance

Purpose: The purpose of this article is to investigate the relationship between environmental disclosure quality (EDQ) and risk and to further examine whether corporate governance (CG) practices moderate this relationship. Design/methodology/approach: This study uses a set of unique, hand collected data (from 2011 to 2016) to measure EDQ for a sample of 762 firm-years Iranian listed companies. Ordinary least squares regression analysis is performed in testing hypotheses after controlling for a variety of firm, industry and year effects. Moreover, several analyses are performed to establish the robustness of the findings. Findings: The results indicate a negative association between EDQ and firm risk. While board independence moderates this relationship, other CG practices such as CEO duality and board size do not show any effects on the relationship between EDQ and risk. The results remain robust after performing sensitivity tests and under various specifications, including the fixed-effects panel data and Heckman two-stage regressions. Research limitations/implications: Results are from a sample of firms from one country. Practical implications: The results have implications for policymakers, legislators and corporate executives, as environmental initiatives are gaining more attention worldwide. Social implications: Sustainability initiatives in the areas of environmental and social performance and disclosure are gaining global attention. This study addresses the link between firm risk and EDQ. Originality/value: This study contributes to the literature by shedding light on the relationship between corporate risk-taking and EDQ in the context of a developing economy