Identifying the aggressive financial reporting of firms

Document Type : Research Paper

Authors

1 Imam Khomeini International University

2 Assistant Professor Department of Accounting, Faculty of Social Sciences, International Imam Khomeini University, Qazvin, Iran.

3 Prof. of Department of Accounting, Faculty of Social Sciences, International Imam Khomeini University, Qazvin, Iran

Abstract

Aggressive financial reporting is the opposite of conservative financial reporting, which means using a low degree of conservatism in preparing financial statements. In these types of reports, there is a tendency to spread good news and keep bad ones. The purpose of this survey, which was conducted by survey method, is to identify the aggressive financial reporting of firms. In order to achieve the above goal, the indicators of this type of reports were prepared by conducting interviews with experts in the accounting and auditing profession and then The validity of the indicators was examined through a questionnaire and structural equation modeling and second-order confirmatory factor analysis in PLS software. The questionnaire was distributed among the members of the Iranian Association of Financial Managers. The number of questionnaires collected after removing incomplete questionnaires is 161. Findings showed that aggressive financial reporting indicators (the existence of Misstatement, unresolved Misstatement in different years, lack of provisions, negative annual adjustments, Unusual changes in sales, Fraud, CEO Changes, executive compensation, Production of non-essential goods and Monopoly firms) have sufficient validity. The final model (measurement, structural and general model) also has a good fit.

Keywords

References

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Empirical Research in Accounting
Volume 12, Issue 3 - Serial Number 45
September 2022
Pages 141-160

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History

  • Receive Date: 21 November 2020
  • Revise Date: 13 February 2021
  • Accept Date: 02 March 2021

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