Iranian Journal of Accounting, Auditing and Finance
Volume:6 Issue: 4, Autumn 2022

Investors are often unwilling to buy shares of companies that have experienced a sharp drop in their prices. Therefore, considering the importance of the phenomenon of falling stock prices, in this research, using the Cup-FM method, the effect of factors affecting the risk of falling stock prices in companies listed on the Tehran Stock Exchange has been studied, with an emphasis on the ownership structure of the companies. In this research, 74 companies were studied as a research sample. The data relating to these companies from 2014 to 2020 are extracted from the financial statements of the companies Rahavard Navin Software and the Codal Website and are used for analysis. The estimation results of the model show the influence of managerial ownership, rate of return on assets (ROA), the market value of the company's assets to its book value and the share of 10 major shareholders on the risk of falling stock prices are negative. These effects are statistically significant since the presence of company managers among the company's shareholders reduces the incentive to manipulate the stock price and thus reduces the risk of the stock price falling. Moreover, high financial leverage, institutional ownership and company size positively affect the risk of stock price fall. In this research, the factors affecting the fall in stock prices of active companies in the Tehran Stock Exchange have been studied with emphasis on the structure and diversity of ownership.

As the business process becomes more complex, financial statement distortion risk increases. In this regard, researchers have been looking for models to detect fraud in financial statements. Beneish (1997) predicted earning manipulation using financial ratios and accruals. Since economic pressure is presented as a manager’s external motivation to manipulate income, the Beneish model is developed based on economic variables, including Inflation Rate, GDP Growth, Exchange Rate, and Economic Growth Rate. The fitting of the random forest, vector machine, and neural network was used to fit the extended model. The results show that the accuracy of the random forest model is 99.96% which is more than the neural network and vector models, 96.1% and 93.62%, respectively. The final results show that the developed model is more accurate than the basic Beneish model. The results show that economic factors play a significant role in fraudulent financial reporting which should be considered when analyzing financial reporting.

One of the strategies of audited firms' management is to divert the auditor's attention from the managed accounts to clean accounts (without misstatement) or accounts that contain misstatements other than managed accounts to affect the auditor's ability to detect fraud. The experimental method and a sample include 106 auditors in 2022. We examine whether managers attempt to reduce the perceived intentionality of their fraudulent misstatements by perpetrating fraud via omission, as opposed to a more active form of commission, and how auditors evaluate the resulting misstatements. We find that managers choose to omit a transaction from the financial statements rather than record a transaction inappropriately. They also decide to omit critical information from supporting documents rather than provide misleading information. However, auditors generally believe that misstatements involving omissions are unintentional. Specifically, we find that auditors are less skeptical of an omitted transaction than a misrecorded transaction. They are also less skeptical of a misstatement that results from management omitting information from a supporting document than misrepresenting information. Finally, a method of fraud (omission) is identified that those managers are likely to use; on the other hand, those auditors are unlikely to judge it as intentional.

The present study intends to test and analyze the tone of market participants' opinions via social media and capital market reaction. We use a sample of 345 firm data from the list of S&P 500 firms and analyze it using Stata software. The results showed no significant relationship between the tone of earnings tweets and market variables. However, the results of separating the tweets into the original earnings tweets and existing earnings tweets indicated a significant relationship between the tone of the initial earnings tweets and abnormal share turnover. Findings also suggest a significant relationship exists between the tone of existing earnings tweets and bid-ask spreads. Further analysis based on separating tweets into positive and negative demonstrated a meaningful relationship between the tone of positive and negative tweets and abnormal stock turnover and spreads. The results confirm that Twitter can provide complementary awareness in capital markets.

The present study designs an earnings management improvement model appropriate for Iranian knowledge-based firms (KBFs). This study is interpretive in the model exploration phase and positivist in the model testing phase, and in general, this is applied research. The research sample in the qualitative phase comprises the experts in the field of earnings management, including accounting faculty members (8), senior managers of KBFs (7), and members of the Iranian National Tax Administration (INTA) (5); thus, a total number of 20 experts were interviewed to collect the qualitative data. The research questionnaire for collecting the quantitative data was designed according to the exploratory factor analysis (EFA). In the quantitative phase, using the sample size calculator (the G*Power software) at the alpha level of 0.1 and test power of 0.85, the final research sample comprises 153 participants. The research approach uses mixed methods, and the employed strategy is grounded theory. The constant comparative method in the three stages of open, axial, and selective coding based on the Strauss et al. (1996) method and the MAXQDA software was employed to analyse the data. The path analysis of the explored model was carried out based on the variance-based structural equation modeling (SEM) using SPSS version 24 and Smart PLS 3.0. The study results indicate 53 indicators, including more than 18 components and 7 latent variables.

In evaluating a business based on the business risk audit (BRA) approach, auditors should define and perceive strategic management control techniques and operating processes. They should also select risk control processes in vital operating processes to estimate the type and magnitude of residual business risks that might affect the accuracy and fairness of financial statements. Given the international re-emergence of BRA concepts in recent years, this approach is considered an essential innovation in the auditing methodology. This study aims to analyze the attitude of Iranian auditing experts toward the BRA efficiency for stakeholders. For this purpose, a researcher-made questionnaire was designed in three dimensions: normative legitimacy of BRA, pragmatic legitimacy of BRA, and cognitive legitimacy of BRA (per dimensions of the legitimacy theory proposed by Greenwood, Suddaby & Hinings, 2002). The questionnaire was then distributed to a research sample including the Partners, Audit Org., and IACPA obtained at the end of 2021; the research results indicated that the BRA approach had normative legitimacy (m= 3.61), pragmatic legitimacy (m= 3.78), and cognitive legitimacy (m= 3.29) in Iran for the opinions of experts and statistical findings. Given the flaws and shortcomings of Iran’s current auditing framework, integrating the BRA approach into the current framework will be promising. At the same time, this approach can prevent over-auditing due to its proven inherent value. It can also be considered a naturally correct method of auditing.

With the growth and development of theoretical approaches in the field of behavioral, the importance of participation and cooperation of individuals within organizational structures to improve the level of practical functions has increased daily. Recognizing the axes that enhance the organisation's effectiveness, such as professional voice, has been essential research in recent years. The purpose of this study is to investigate the effect of the motivational principles of individual behavior voice on the professional ethics of internal auditors by understanding the conceptual and theoretical understanding of professional voice in auditing and recognising the functional and behavioral nature of internal auditors. The final sample of this study is 183  internal auditors of Iranian listed firms in 2020. The research tool is a questionnaire, and partial least squares analysis is used to fit the model and test the research hypotheses. The results of testing the research hypotheses show that self-efficacy, level of hope, and resilience, as the criteria of the stimulus process in the voice of individual behavior have a positive and significant effect on the moral courage of the internal auditor. These results suggest that if behavioral incentives are considered, auditors' level of behavioral audacity in more realistically disclosing the financial performance of their companies can be expected to increase. It should also be noted that this study's results can increase the effectiveness of internal auditors' functions and their behavioral knowledge in the direction of professional functions.