Investigating the Impact of implementing Internal Controls Guidelines and Audit Firms Ranking on the Transparency of Financial Reporting

mazaheri, Esmaeil; Montazer Hojat, Amir Hossein; Azizi Kheirabadi, milad

[Home ] [Archive]

[ فارسی ]

Main Menu

Home

Journal Information

Articles archive

For Authors

For Reviewers

Registration

Contact us

Site Facilities

Search in website

Receive site information

year 14, Issue 53 (2022)

fa 2022, 14(53): 83-99

Back to browse issues page

Investigating the Impact of implementing Internal Controls Guidelines and Audit Firms Ranking on the Transparency of Financial Reporting

Esmaeil Mazaheri ^*

¹, Amir Hossein Montazer Hojat²

, Milad Azizi Kheirabadi¹

1- Department 0f Accounting, Faculty of Economics and Social Sciences, Shahid Chamran University of Ahvaz, Ahvaz, Iran.
2- Department 0f Economics, Faculty of Economics and Social Sciences, Shahid Chamran University of Ahvaz, Ahvaz, Iran.

Abstract: (2960 Views)

Transparency of financial reporting is a factor that influences on the viewpoint of investors about a company. According to the previous sentence, many researchers have done some investigations in order to find solutions for increasing and improving the transparency of the financial reporting transparency. In order to increase transparency, Stock Exchange Organization of Iran has legislated some instructions for the internal control environments and the ranking of auditing firms. In order to evaluate the transparency, four criteria including institutional owners, capability of forecasting the earning, debt ratio and the earning manipulation have been used in this research. The purpose of this study is evaluating the effects of the instructions that mentioned above on the transparency of the financial reporting of the companies which are listed in Tehran Stock Exchange.In order to achieve the research objectives, 159 companies which are listed in Tehran Stock Exchange in the period of 2008 to 2022 are chosen. Also, the linear regression pattern and the panel data method with fixed effects are used in this research in order to validate the hypotheses of the research.The findings showed that the process of executing the instructions of the internal control environments and the ranking of auditing firms, which has been legislated by Stock Exchange Organization of Iran in order to develop a transparent market and helping the investors, increases the transparency of financial reporting.The findings in this research shows that the obligation of companies to execute the instructions of the internal control environment and preparing its checklist and executing the instructions of the ranking of auditing firms for using the auditing services of trusted auditors which is obliged by Stock Exchange Organization of Iran, has increased the transparency of financial reporting.

Article number: 5

Keywords: Internal Controls Guideline, Audit Firms Ranking Guideline, Transparency of Financial Reporting

Full-Text [PDF 621 kb] (98 Downloads)

Type of Study: Research | Subject: Special

References

1. Ashbaugh- Skaife, H., Collins, D. W., Kinney, W. R., LaFond, R. (2008). The Effect of Internal Control Deficienciesand Their Remediation on Accrual Quality. Accounting Reviw Vol.83, No. 1, Pp. 217- 250.

2. Barra, R.A. (2010). The Impact of Internal Controls and Penalties on Fraud. Journal of Information Systems.

3. Bushman, R., Piotroski, J., Smith, A. (2004). What determines corporate transparency?Journal of accounting Research, Vol. 42 No. 2 May 2004: 207-252.

4. Chen, S., Lai, S., Liu, C., McVay, S. (2014). Overconfident managers and internal controls.Working Paper, National Taiwan University and University of Washington.

6. DeAngelo, L. (1981). Auditor size and audit quality. Journal of Accounting and Economics, 3, 297−322.

7. Dichev, lia D., Tang, Vicki Wei (2008). "Earnings volatility and earnings predictability", Journal of Accounting and Economics, No 47.pp160-181

8. Francis, J. & Krishnan, J. (1999). Accounting accruals and auditor reporting conservatism. Contemporary Accounting Research, 16, 135-165.

9. Gernon, H., & Meeks, G.K. (1997). Accounting an international perspective. 5th edn, Irwin McGraw- Hill, Singapore.

10. Hsiu, J. F. (2006). Effect of Financial Information Transparency on Investor Behavior in Taiwan Stock Market. Proquest Database, 16(3), 6-22.

11. Ji, X., Lu, W., Qu, W. (2018). Voluntary Disclosure of Internal Control Weakness and Earnings Quality: Evidence From China. The International Journal of Accounting. 52.

12. Mary Jane,L. Karin, A.P., Pervaiz,A., Bing,Y. (2016). Internal control weaknesses and evidence of real activities manipulation: Advances in Accounting. 33 , 47–58.

14. Ogneva, M., Subramanyam, K. R., Raghunandan, K. (2007). Internal Control Weakness and Cost of Equity:Evidence From Sox Section 404 Disclosures. Accounting Review, Vol. 82, No. 5, Pp.1255- 1297.

15. Prabowo, R., & Angkoso, K.S. (2006). Factors Influencing The Extent Of Web-Based Disclosure: An Empirical Analysis Of Indonesian Manufacturing Firms. Jurnal Akuntansi Dan Keuangan, 8 (2), Pp. 92-98.

16. Chang, Y.T., H. Chen, R.K. Cheng & W. Chi. (2019). The impact of internal audit attributes on the effectiveness of internal control over operations and compliance. Journal of Contemporary Accounting & Economics 15(1): 1-19.

Send email to the article author

Add your comments about this article

‎ 20.1001.1.23452617.1401.14.53.6.6

Mendeley

Zotero

RefWorks

mazaheri E, Montazer Hojat A H, Azizi Kheirabadi M. Investigating the Impact of implementing Internal Controls Guidelines and Audit Firms Ranking on the Transparency of Financial Reporting. fa 2022; 14 (53) : 5
URL: http://qfaj.mobarakeh.iau.ir/article-1-2585-en.html

Rights and permissions
	This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

year 14, Issue 53 (2022)

Back to browse issues page

Persian site map - English site map - Created in 0.05 seconds with 37 queries by YEKTAWEB 4679