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Author(s): Mohammadreza Abdoli

Journal: Australian Journal of Business and Management Research
ISSN 1839-0846

Volume: 1;
Issue: 4;
Start page: 93;
Date: 2011;
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Keywords: discretionary accrual accounting | non executive director | ownership concentration

In this study we consider the relationship and the effect of performance of non executive directors and ownership concentration on earnings manipulation by company's managers. On the basis of governance rule and also Iran business rule, the companies in Tehran stock exchange should abide about the combination of the board and also interrelated committee and protect minority stockholders against majority. In order to do this research, the information of the companies in financial statements and the reports of the Tehran stock exchangehave been used. For the measurements of the earnings smoothing John's adjusted model has been used and for the measurement of the concentration of company's ownership "Herfindal" and "Hireshman" has been used. The choice of the companies is randomly and the confidence interval has been considered %95 .For research ,observe 435 corporation- year and time period is 2005 – 2010. The results of the research reveal don'tmeaningful relationship of non executive directors and discretionary accrual accounting and the relationship is a positive. In companies which the concentration of ownership is high, management and earnings manipulationis also high and has a meaningful relationship and negative with these variables. The segregation of the companies into government and private causes to different the results. In private companies the concentration of the ownership is little and the statistical mean of discretionary accrual accounting items is low and non executive directors ratio is low but in governmental corporations statistical mean of discretionary accrual accounting item is high and ratio of corporations that has internal auditing is high to private corporations .Further more almost of non executive directors in Iranian corporation have nonfinancial technique and knowledge and ratio of them in board corporation is higher than executive directors.
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