The Effect of Managerial Ability on Earnings Classification Shifting and Agency Cost of Iranian Listed Companies
The objective of this study is to examine the relationship between managerial ability and earnings classification shifting of firms listed in the Tehran Stock Exchange (TSE). The paper consists of a sample of 1,875 firm-year observations after applying systematic elimination sampling method during a...
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| Format: | Article |
| Language: | English |
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Wiley
2021-01-01
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| Series: | Discrete Dynamics in Nature and Society |
| Online Access: | http://dx.doi.org/10.1155/2021/5565605 |
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| author | Mohsen Imeni Mohammad Fallah Seyyed Ahmad Edalatpanah |
| author_facet | Mohsen Imeni Mohammad Fallah Seyyed Ahmad Edalatpanah |
| author_sort | Mohsen Imeni |
| collection | DOAJ |
| description | The objective of this study is to examine the relationship between managerial ability and earnings classification shifting of firms listed in the Tehran Stock Exchange (TSE). The paper consists of a sample of 1,875 firm-year observations after applying systematic elimination sampling method during a period of fifteen years, from 2005 to 2019. This study used the multivariate panel data regression for testing the links between variables. The results of this study provide that there is a positive relationship between managerial ability and earnings classification shifting. The obtained results indicate that there is a negative relationship between managerial ability and real earnings management and no relationship between managerial ability and AEM. In addition, managerial ability mitigates the negative effect of earnings management on future firm performance. Furthermore, managerial ability affects its agency cost positively due to the reduction in earnings management. This paper contributes to developing management literature and financial reporting literature. The study focuses on links managerial ability and earnings classification shifting and agency cost in a developing country like Iran, and the results of the paper can fill distance theory and practice by empirical test. Furthermore, the results of this study indicate in an emerging market, namely, Iran, that has a political business environment among the other countries of the Middle East, managerial ability can release Iranian firms on economic sanctions and financial pressures. This paper is the first study of its type in Iran. |
| format | Article |
| id | doaj-art-d537d345b33b4e1fb8d4a6aa306a885b |
| institution | OA Journals |
| issn | 1026-0226 1607-887X |
| language | English |
| publishDate | 2021-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Discrete Dynamics in Nature and Society |
| spelling | doaj-art-d537d345b33b4e1fb8d4a6aa306a885b2025-08-20T02:19:58ZengWileyDiscrete Dynamics in Nature and Society1026-02261607-887X2021-01-01202110.1155/2021/55656055565605The Effect of Managerial Ability on Earnings Classification Shifting and Agency Cost of Iranian Listed CompaniesMohsen Imeni0Mohammad Fallah1Seyyed Ahmad Edalatpanah2Department of Accounting, Ayandegan Institute of Higher Education, Tonekabon, IranDepartment of Industrial Engineering, Branch of Center Tehran, Azad Islamic University, Tehran, IranDepartment of Applied Mathematics, Ayandegan Institution of Higher Education, Tonekabon, IranThe objective of this study is to examine the relationship between managerial ability and earnings classification shifting of firms listed in the Tehran Stock Exchange (TSE). The paper consists of a sample of 1,875 firm-year observations after applying systematic elimination sampling method during a period of fifteen years, from 2005 to 2019. This study used the multivariate panel data regression for testing the links between variables. The results of this study provide that there is a positive relationship between managerial ability and earnings classification shifting. The obtained results indicate that there is a negative relationship between managerial ability and real earnings management and no relationship between managerial ability and AEM. In addition, managerial ability mitigates the negative effect of earnings management on future firm performance. Furthermore, managerial ability affects its agency cost positively due to the reduction in earnings management. This paper contributes to developing management literature and financial reporting literature. The study focuses on links managerial ability and earnings classification shifting and agency cost in a developing country like Iran, and the results of the paper can fill distance theory and practice by empirical test. Furthermore, the results of this study indicate in an emerging market, namely, Iran, that has a political business environment among the other countries of the Middle East, managerial ability can release Iranian firms on economic sanctions and financial pressures. This paper is the first study of its type in Iran.http://dx.doi.org/10.1155/2021/5565605 |
| spellingShingle | Mohsen Imeni Mohammad Fallah Seyyed Ahmad Edalatpanah The Effect of Managerial Ability on Earnings Classification Shifting and Agency Cost of Iranian Listed Companies Discrete Dynamics in Nature and Society |
| title | The Effect of Managerial Ability on Earnings Classification Shifting and Agency Cost of Iranian Listed Companies |
| title_full | The Effect of Managerial Ability on Earnings Classification Shifting and Agency Cost of Iranian Listed Companies |
| title_fullStr | The Effect of Managerial Ability on Earnings Classification Shifting and Agency Cost of Iranian Listed Companies |
| title_full_unstemmed | The Effect of Managerial Ability on Earnings Classification Shifting and Agency Cost of Iranian Listed Companies |
| title_short | The Effect of Managerial Ability on Earnings Classification Shifting and Agency Cost of Iranian Listed Companies |
| title_sort | effect of managerial ability on earnings classification shifting and agency cost of iranian listed companies |
| url | http://dx.doi.org/10.1155/2021/5565605 |
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