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2018
Publication Date: 2018/08/23
پیشرفت های حسابداری (20089988)(1)pp. 64-97
Introduction
There is an ambiguity about future state of the firms and capital market in conditions of uncertainty. In such a situation, the arrival of any information signal such as earnings announcement may reduce uncertainty leading to a revision of the previous beliefs of investors. Uncertainty could be divided into two groups: market uncertainty and information uncertainty. Investors’ reaction to earnings announcement may be different in these two situations. Under high market uncertainty, firms’ earnings announcement as an information signal may have a greater impact on investors' beliefs and, as a result, leads to more investors’ reaction to firms’ earnings announcement. However, more accurate information signals have a stronger impact on investors' beliefs. In other words, there is under reaction to earnings announcement, when announced earnings contain high uncertainty. Therefore, this study attempts to investigate investors’ reaction to earnings announcement with regards to market and information uncertainty. In addition, this study examines simultaneous effect of these two types of uncertainty on the investors 'reaction to earnings announcement.
Hypotheses
According to the literature, the research hypotheses include:
H1: Under high market uncertainty, investors’ reaction to earnings announcement is higher than low market uncertainty.
H2: Under high information uncertainty, investors’ reaction to earnings announcement is less than low information uncertainty.
H3: Investors’ reaction to earnings announcement under market uncertainty decreases with an increase in the level of information uncertainty.
Methods
In this study, in order to calculate the variables and test the hypotheses, required data was collected from the audited financial statements and its footnotes of listed companies in the Tehran Stock Exchange and the existing databases including “Rahavard Novin” and “Codal”. The sample of this study consists of 162 listed companies in Tehran Stock Exchange from 2005 to 2015. Market uncertainty was measured by the standard deviation of daily market returns during the one month prior to the firms’ earnings announcement. Information uncertainty was calculated by two criteria including quality information and cash flows volatility based on matched-firm design. Panel data method and Wald test were used to estimate models and test of hypotheses, respectively.
Results
Results showed the higher market uncertainty (compared to lower uncertainty), the more investors' response to firms’ earnings announcements. Results also showed, the higher information uncertainty (compared to lower uncertainty), the less investors' response to firms’ earnings announcements. Moreover simultaneous analysis of the "market and information" uncertainty on the investors' reactions to earnings announcements showed although investors' responses to earnings announcements decrease on the high information uncertainty situation, yet unexpectedly, the coefficient of unexpected earnings in the high market uncertainty is less than its coefficient in the low market uncertainty.
Discussion and Conclusion
Previous studies often focus on the market uncertainty or the information uncertainty. There are few studies that examine the simultaneous effect of these two types of uncertainty. Therefore, the aim of this study was investigating investors’ reaction to earnings announcement considering both market and information uncertainty. In the first hypothesis, we investigated investors’ reaction to earnings announcement, when market uncertainty is high. Results showed, investors show more reaction to earnings announcement under high market uncertainty. Therefore, the first hypothesis is not rejected. Results of the second hypothesis indicated when firms’ information such as accounting earnings is ambiguous and uncertain, there are less investors’ reaction to earnings announcement and the second hypothesis is also not rejected. Moreover, simultaneous analysis of both uncertainty on the investors' reaction showed although investors' responses to earnings announcements decrease by an increase in the information uncertainty, but unexpectedly, investors show less reaction, when there is a high market uncertainty. It may be due to behavioral bias or lack of investor knowledge for analyzing information. Therefore, the third hypothesis is rejected.
There is an ambiguity about future state of the firms and capital market in conditions of uncertainty. In such a situation, the arrival of any information signal such as earnings announcement may reduce uncertainty leading to a revision of the previous beliefs of investors. Uncertainty could be divided into two groups: market uncertainty and information uncertainty. Investors’ reaction to earnings announcement may be different in these two situations. Under high market uncertainty, firms’ earnings announcement as an information signal may have a greater impact on investors' beliefs and, as a result, leads to more investors’ reaction to firms’ earnings announcement. However, more accurate information signals have a stronger impact on investors' beliefs. In other words, there is under reaction to earnings announcement, when announced earnings contain high uncertainty. Therefore, this study attempts to investigate investors’ reaction to earnings announcement with regards to market and information uncertainty. In addition, this study examines simultaneous effect of these two types of uncertainty on the investors 'reaction to earnings announcement.
Hypotheses
According to the literature, the research hypotheses include:
H1: Under high market uncertainty, investors’ reaction to earnings announcement is higher than low market uncertainty.
H2: Under high information uncertainty, investors’ reaction to earnings announcement is less than low information uncertainty.
H3: Investors’ reaction to earnings announcement under market uncertainty decreases with an increase in the level of information uncertainty.
Methods
In this study, in order to calculate the variables and test the hypotheses, required data was collected from the audited financial statements and its footnotes of listed companies in the Tehran Stock Exchange and the existing databases including “Rahavard Novin” and “Codal”. The sample of this study consists of 162 listed companies in Tehran Stock Exchange from 2005 to 2015. Market uncertainty was measured by the standard deviation of daily market returns during the one month prior to the firms’ earnings announcement. Information uncertainty was calculated by two criteria including quality information and cash flows volatility based on matched-firm design. Panel data method and Wald test were used to estimate models and test of hypotheses, respectively.
Results
Results showed the higher market uncertainty (compared to lower uncertainty), the more investors' response to firms’ earnings announcements. Results also showed, the higher information uncertainty (compared to lower uncertainty), the less investors' response to firms’ earnings announcements. Moreover simultaneous analysis of the "market and information" uncertainty on the investors' reactions to earnings announcements showed although investors' responses to earnings announcements decrease on the high information uncertainty situation, yet unexpectedly, the coefficient of unexpected earnings in the high market uncertainty is less than its coefficient in the low market uncertainty.
Discussion and Conclusion
Previous studies often focus on the market uncertainty or the information uncertainty. There are few studies that examine the simultaneous effect of these two types of uncertainty. Therefore, the aim of this study was investigating investors’ reaction to earnings announcement considering both market and information uncertainty. In the first hypothesis, we investigated investors’ reaction to earnings announcement, when market uncertainty is high. Results showed, investors show more reaction to earnings announcement under high market uncertainty. Therefore, the first hypothesis is not rejected. Results of the second hypothesis indicated when firms’ information such as accounting earnings is ambiguous and uncertain, there are less investors’ reaction to earnings announcement and the second hypothesis is also not rejected. Moreover, simultaneous analysis of both uncertainty on the investors' reaction showed although investors' responses to earnings announcements decrease by an increase in the information uncertainty, but unexpectedly, investors show less reaction, when there is a high market uncertainty. It may be due to behavioral bias or lack of investor knowledge for analyzing information. Therefore, the third hypothesis is rejected.
Introduction
The desire to gain long-term benefits in the field of professional credit and earnings has led to considering audit quality as a factor of increasing professional competitiveness in audit services' market from the viewpoint of auditors, and from this perspective, this has been considered in conducted studies. Palmrose (1988) defined the quality of the audit as follows: ensuring the financial statements is audit quality and the financial statements are free from any significant misstatement". This definition emphasizes the result of the audit, because the ability to rely on financial statements before the audit cannot be specified; therefore, the actual quality of the audit cannot be observed and cannot be evaluated until the audit has reached its result (Hasas Yeganeh and Azinfar, 2010). Titman and Trueman (1986) also believe that since actual audit quality cannot be observed before auditing or during auditing, there is a need for variables to evaluate the actual quality of the audit. Although many factors affect the quality of audit services, few studies have been conducted to create a conceptual framework or model for describing the structure of quality of audit services. In recent decades, some of the studies conducted in the field of audit quality have attempted to provide an analytical framework based on audit regulations in European countries, as well as the results of previous studies, including Carcello et al. (1992), Knechel et al. (2013). Of course, the study results of Francis (2011) and Gonthier Besacier et al. (2016), which provide the analytical framework for a more complete audit quality according to the results of previous studies and European audit regulations (especially French), and are more similar to Sarbanes Oxley regulatory texts, have been great efforts in this field. This study by formulating factors affecting the quality of audit according to the results of studies conducted and solutions presented in Iranian auditing standards regarding the quality improvement of audit services and presenting them in the form of a conceptual model attempts to consider single and distributed factors affecting the quality of audit based on previous studies in the form of the main and operational factors.
Hypotheses
The hypotheses of this research are as follows:
H1: Audit operations affect audit quality.
H2: Audit group activity affects audit quality.
H3: Auditing rules affect audit quality.
Methods
The information needed to test the research hypotheses have been obtained through a researcher-made questionnaire. The first statistical population of this study consists of CPA’s working in an independent audit profession as managers, senior managers, supervisors and senior supervisors (in the audit firm), partners, technical managers, audit supervisors and senior supervisors (in private audit firms), and the second statistical population of this study consists of financial managers of all investment companies that operate under the supervision of Securities and Exchange Organization. The sampling method in this study is a categorized probability sampling method for the first statistical population of this study. The subjects are selected from all classes conveniently. For this reason, we used Cochran formula to estimate the sample size in each class of the statistical population. Among the numbers obtained as the sample size of each class, the largest value was chosen as the final sample size. The final sample size obtained from this study was n = 205 for the first statistical population and n = 74 for the second statistical population of all investment companies operating under the supervision of Securities and Exchange Organization and questionnaires were distributed to respondents through in person referring and / or sent by email. After distributing the questionnaires, in total, 174 questionnaires were collected. 6 questionnaires were unusable due to failure to answer all questions, and a total of 168 questionnaires were used in statistical analysis. Regarding the theoretical concepts presented on the quality of the audit, this concept cannot be observed; therefore, the dependent variable is hidden and endogenous, and the independent variables are also hidden, but are exogenous. Consequently, the evaluation of the conceptual model of the research to study the research hypotheses based on the structural equations modeling with partial least squares approach was conducted to study the causal relationships between the invisible and hidden variables with interwoven relationships.
Discussion and Conclusion
The factors affecting the audit quality in three fields of audit operations, audit regulations and audit group are presented in the form of a conceptual model based on the analytical framework based on previous conducted studies. Regarding theoretical concepts of audit quality, this concept cannot be observed. As a result, the evaluation of the conceptual model of the research to test the research hypotheses based on the structural equations modeling with partial least squares approach was used to study the causal relationships between the visible and hidden variables with interwoven relationships including four reflective measurement models and a structural model. After testing validity and reliability of reflective measurement models, the general test of these models and testing the quality of the structural model for the research hypotheses, it was found that the null hypothesis was rejected in the test of all three hypotheses that is the claim contradiction, indicating that all the hypotheses of the research were confirmed and the above factors affect the quality of audit services. The results also indicate the general utility of the general structural model designed to predict the factors affecting the quality of the audit services. According to the conceptual model, 20 qualitative features were presented to review them. The study of the effects of all exogenous independent variables (audit operations, audit group and audit regulations) on the endogenous dependent variable of the model (audit quality) showed that the independent variable of audit operations with a direct effect factor of 0.431, independent variable of the audit group with a direct effect factor of 0.299 and independent variable of audit regulations with a direct effect factor of 0.253 in total could explain 79.6 percent of the total variation in audit quality.
The desire to gain long-term benefits in the field of professional credit and earnings has led to considering audit quality as a factor of increasing professional competitiveness in audit services' market from the viewpoint of auditors, and from this perspective, this has been considered in conducted studies. Palmrose (1988) defined the quality of the audit as follows: ensuring the financial statements is audit quality and the financial statements are free from any significant misstatement". This definition emphasizes the result of the audit, because the ability to rely on financial statements before the audit cannot be specified; therefore, the actual quality of the audit cannot be observed and cannot be evaluated until the audit has reached its result (Hasas Yeganeh and Azinfar, 2010). Titman and Trueman (1986) also believe that since actual audit quality cannot be observed before auditing or during auditing, there is a need for variables to evaluate the actual quality of the audit. Although many factors affect the quality of audit services, few studies have been conducted to create a conceptual framework or model for describing the structure of quality of audit services. In recent decades, some of the studies conducted in the field of audit quality have attempted to provide an analytical framework based on audit regulations in European countries, as well as the results of previous studies, including Carcello et al. (1992), Knechel et al. (2013). Of course, the study results of Francis (2011) and Gonthier Besacier et al. (2016), which provide the analytical framework for a more complete audit quality according to the results of previous studies and European audit regulations (especially French), and are more similar to Sarbanes Oxley regulatory texts, have been great efforts in this field. This study by formulating factors affecting the quality of audit according to the results of studies conducted and solutions presented in Iranian auditing standards regarding the quality improvement of audit services and presenting them in the form of a conceptual model attempts to consider single and distributed factors affecting the quality of audit based on previous studies in the form of the main and operational factors.
Hypotheses
The hypotheses of this research are as follows:
H1: Audit operations affect audit quality.
H2: Audit group activity affects audit quality.
H3: Auditing rules affect audit quality.
Methods
The information needed to test the research hypotheses have been obtained through a researcher-made questionnaire. The first statistical population of this study consists of CPA’s working in an independent audit profession as managers, senior managers, supervisors and senior supervisors (in the audit firm), partners, technical managers, audit supervisors and senior supervisors (in private audit firms), and the second statistical population of this study consists of financial managers of all investment companies that operate under the supervision of Securities and Exchange Organization. The sampling method in this study is a categorized probability sampling method for the first statistical population of this study. The subjects are selected from all classes conveniently. For this reason, we used Cochran formula to estimate the sample size in each class of the statistical population. Among the numbers obtained as the sample size of each class, the largest value was chosen as the final sample size. The final sample size obtained from this study was n = 205 for the first statistical population and n = 74 for the second statistical population of all investment companies operating under the supervision of Securities and Exchange Organization and questionnaires were distributed to respondents through in person referring and / or sent by email. After distributing the questionnaires, in total, 174 questionnaires were collected. 6 questionnaires were unusable due to failure to answer all questions, and a total of 168 questionnaires were used in statistical analysis. Regarding the theoretical concepts presented on the quality of the audit, this concept cannot be observed; therefore, the dependent variable is hidden and endogenous, and the independent variables are also hidden, but are exogenous. Consequently, the evaluation of the conceptual model of the research to study the research hypotheses based on the structural equations modeling with partial least squares approach was conducted to study the causal relationships between the invisible and hidden variables with interwoven relationships.
Discussion and Conclusion
The factors affecting the audit quality in three fields of audit operations, audit regulations and audit group are presented in the form of a conceptual model based on the analytical framework based on previous conducted studies. Regarding theoretical concepts of audit quality, this concept cannot be observed. As a result, the evaluation of the conceptual model of the research to test the research hypotheses based on the structural equations modeling with partial least squares approach was used to study the causal relationships between the visible and hidden variables with interwoven relationships including four reflective measurement models and a structural model. After testing validity and reliability of reflective measurement models, the general test of these models and testing the quality of the structural model for the research hypotheses, it was found that the null hypothesis was rejected in the test of all three hypotheses that is the claim contradiction, indicating that all the hypotheses of the research were confirmed and the above factors affect the quality of audit services. The results also indicate the general utility of the general structural model designed to predict the factors affecting the quality of the audit services. According to the conceptual model, 20 qualitative features were presented to review them. The study of the effects of all exogenous independent variables (audit operations, audit group and audit regulations) on the endogenous dependent variable of the model (audit quality) showed that the independent variable of audit operations with a direct effect factor of 0.431, independent variable of the audit group with a direct effect factor of 0.299 and independent variable of audit regulations with a direct effect factor of 0.253 in total could explain 79.6 percent of the total variation in audit quality.
2019
Publication Date: 2019/11/22
پیشرفت های حسابداری (20089988)(2)pp. 285-320
The purpose of the present study is to develop a comprehensive optimal portfolio model using accounting information analysis, value-based information and balanced scorecard information. The statistical population of the research is the companies listed in Tehran Stock Exchange during the period 2007-2017. In order to achieve the objectives of the research, the formulation of dimensionality reduction, data envelopment analysis methods, backing vector machines, and clustering algorithms were used. The above model was implemented in four steps and in each step besides risk and return component, accounting criteria, value based criteria and financial criteria and then non-financial balanced scorecard were used as input step by step portfolio model. The findings of the research indicate that the criteria used in the research for optimizing the portfolio of stocks have informational content and the addition of each set of criteria leads to an increase in the efficiency of the portfolio. This information content of the balanced scorecard is even more impressive. Overall, the simultaneous application of hybrid optimization methods and comprehensive benchmarks extracted from financial reports resulted in a more optimized portfolio and higher risk-taking and Markovitz literature returns.
* Corresponding author:
Mehdi Arab Salehi
Associate Professor of Accounting, Esfahan University, Iran.
1- Introduction
One of the main goals of accounting is providing information for use in investment decisions. The discovery of the value of information provided by accounting systems is one of the major axes of empirical studies in the field of financial and accounting knowledge. Given the constraints on investment resources, if investors invest all their resources in a particular asset, they will increase the risk of losing their resources, which is not, in their view, desirable. Therefore, the main problem for investors is the determination of a set of securities that leads to maximization of wealth. This also leads to the selection of the optimal stock portfolio from a set of stock portfolios in order to maximize the benefits to shareholders. The effective components of choosing the optimal stock portfolio are two main factors: the criteria used in stock portfolios and the approach of choosing stock portfolios. In this research, we focus on choosing the optimal portfolio based on a comprehensive model including accounting information, value-based information and balanced scorecard information and a dimensionality reduction approach.
2- Research Question
Is it possible to use a comprehensive set of analysis of accounting information, value-based information and a balanced scorecard information, and using the Dimension Reduction Approach to create an optimal stock portfolio model, so that this model would increase shareholders' returns?
3- Methods
The research methodology is a quantitative research that uses the scientific method and empirical evidence, and based research designs is done. The empirical data was collected from a panel consisting of 103 Iranian companies listed in TSE, over the seven-year period of 2007 to 2017. The criteria used in this study are accounting information, value-based information and balanced scorecard information. In order to achieve the research goals and to create optimal stock portfolios, we used Data Envelopment Analysis, Support Vector Machine and Anomaly Clustering algorithms. The above method was implemented in four stages. At each stage, in addition to the risk and return components, we used accounting information, value-based information and balanced scorecard information as a step-by-step portfolio input.
4- Results
The findings of the research indicate that the criteria used in the research to provide the stock portfolio are informative and adding each category of criteria will lead to an increase in the utility of the stock portfolio. In addition, this in formativeness has increased significantly with the balanced scorecard. Generally, the simultaneous use of hybrid optimization techniques and comprehensive criteria derived from the financial stock portfolios were more optimal and more favorable than the risk and efficiency of the Markovitz literature.
* Corresponding author:
Mehdi Arab Salehi
Associate Professor of Accounting, Esfahan University, Iran.
1- Introduction
One of the main goals of accounting is providing information for use in investment decisions. The discovery of the value of information provided by accounting systems is one of the major axes of empirical studies in the field of financial and accounting knowledge. Given the constraints on investment resources, if investors invest all their resources in a particular asset, they will increase the risk of losing their resources, which is not, in their view, desirable. Therefore, the main problem for investors is the determination of a set of securities that leads to maximization of wealth. This also leads to the selection of the optimal stock portfolio from a set of stock portfolios in order to maximize the benefits to shareholders. The effective components of choosing the optimal stock portfolio are two main factors: the criteria used in stock portfolios and the approach of choosing stock portfolios. In this research, we focus on choosing the optimal portfolio based on a comprehensive model including accounting information, value-based information and balanced scorecard information and a dimensionality reduction approach.
2- Research Question
Is it possible to use a comprehensive set of analysis of accounting information, value-based information and a balanced scorecard information, and using the Dimension Reduction Approach to create an optimal stock portfolio model, so that this model would increase shareholders' returns?
3- Methods
The research methodology is a quantitative research that uses the scientific method and empirical evidence, and based research designs is done. The empirical data was collected from a panel consisting of 103 Iranian companies listed in TSE, over the seven-year period of 2007 to 2017. The criteria used in this study are accounting information, value-based information and balanced scorecard information. In order to achieve the research goals and to create optimal stock portfolios, we used Data Envelopment Analysis, Support Vector Machine and Anomaly Clustering algorithms. The above method was implemented in four stages. At each stage, in addition to the risk and return components, we used accounting information, value-based information and balanced scorecard information as a step-by-step portfolio input.
4- Results
The findings of the research indicate that the criteria used in the research to provide the stock portfolio are informative and adding each category of criteria will lead to an increase in the utility of the stock portfolio. In addition, this in formativeness has increased significantly with the balanced scorecard. Generally, the simultaneous use of hybrid optimization techniques and comprehensive criteria derived from the financial stock portfolios were more optimal and more favorable than the risk and efficiency of the Markovitz literature.
Publication Date: 2019/11/22
پیشرفت های حسابداری (20089988)(2)pp. 253-284
Fair value accounting for valuation of assets and liabilities has given managers the discretion.The purpose of this study is to investigate the effect of manager’s discretion allowed in fair value measurement on investment selling decisions. In order to test the research hypotheses, a questionnaire based on the scenario was used. This questionnaire is based on Green et al. (2015). The statistical population consists of all active financial analysts in investment companies and stock exchange brokers and the statistical sample of the study was determined using the sample size tables of Cohen et al. (2000) of 268 people. Multivariate analysis of variance (MANOVA) and univariate analysis of variance (ANOVA) were used to analyze the data and test hypotheses. The results of this study showed that conservatism and its interaction with the fair value volatility have a significant effect on the investment selling decisions based on fair value, but the fair value volatility has no significant effect on these decisions. Overall, the results of the research showed that the directors' discretions in fair value accounting affects investment selling decisions.
1- Introduction
Accounting academics and practitioners have been debating the reliability and relevance of fair value accounting. According to Financial Accounting Standards, fair value accounting, often referred to as mark-to-market occurs when a firm revalues assets and liabilities based on an exit price. Advocates contend that fair value provides valuable and timely information to financial statement users by increasing transparency that aid in assessing firm value. In contrast, opponents argue that fair value is transitory because once the asset or liability is traded, the related accounting entries are reversed (Green, 2015). Thus, fair value may provide misleading and unreliable information. In particular, Level 3 fair value assets have no observable inputs and are valued by managers’ assumptions, thus the fair value is subjective (Zyla, 2013).
Level 3 fair values are unique in that subjective assumptions that are necessary to arrive at the fair value are based on unobservable inputs. According to the IASB codification glossary, unobservable inputs are defined as “market data that are not available and that are developed using the best information available about the assumptions that market participants would use 2 when pricing the asset or liability”. Depending on the valuation method selected, discretion can include the expected life of the asset or liability, the cash discount rate, and risk return rates (Zyla, 2013). This discretion can affect financial statements.
Prior reserch has established that factors such as earnings management (Dechow and Shakespear, 2009, Dechow et al, 2010), optimism (Kedia and Philippon, 2009), national culture (Ball et al., 2000), fear of litigation (Lobo and Zhou, 2006), and auditor compliance (Milbradt 2012) influence the recognized fair value. However, limited research has examined how managerial behavioral effects prior to recognizing fair value (Chen et al., 2013, Green, 2015).
Motivated reasoning theory contends that individuals will perceive information in a manner that will benefit their desired outcome (Kunda 1990). Thus, managers are likely to view a fair value that results in gains as a valid representation of the true underlying value. Because of the resulting unrealized gains, managers will be motivated to base Level 3 fair value selling decisions at the fair valuation amount (Green, 2015).
When examining manager’s likelihood to sell a Level 3 fair value asset or liability, prospect theory (Kahneman and Tversky, 1979) suggests that only unrealized gain from the increase of the recognized fair value will motivate managers to be risk averse. In order to preserve the unrealized gain, managers will not sell the asset or liability if the market offers a price less than the most recent recognized fair value (Green, 2015).
2- Research hypotheses
Based on theoretical foundations and research background, the research hypotheses can be expressed as follows:
H1: The conservative level used in the assessment of fair value affects the decision to sell investment at the 3 level of fair value.
H2: The level of historical volatility of fair value affects the decision to sell investment at the 3 level of fair value.
H3: The interaction of the level of conservatism and the level of historical volatility of fair value, affects the decisio to sell investment at the 3 level of fair value.
3- Methods
This research in terms of purpose is a fundamental research, in terms of method is quasi-empirical and in the point of data collection is survey. In this research, to test the research hypotheses, a questionnaire based on the scenario was used. This questionnaire is based on Green (2015). The statistical population consists of all active financial analysts in investment companies and stock exchange brokers and the statistical sample of the study was determined using the sample size tables of Cohen et al. (2000) of 268 people. Multivariate analysis of variance (MANOVA) and univariate analysis of variance (ANOVA) were used to analyze the data and test hypotheses.
4- Results
The results of this study showed that conservatism and its interaction with the fair value volatility have a significant effect on the investment selling decisions based on fair value. However, the fair value volatility has no significant effect on these decisions. The other results showed that financial analysts' demographic characteristics do not have a significant effect on investment decision-making. Overall, the results of the research showed that the directors' discretions in fair value accounting affects investment selling decisions.
5- Discussion and conclusion
Findings of the research indicate that with the increase in the level of conservatism used in the assessment of fair value, managers' willingness to sell investments increases. This result is consistent with the motivated reasoning and the prospect theory. The results of this study are consistent with the results of Green (2015). In addition, the results of the research showed that the historical volatility of fair value does not affect the decision of investment sales. This result is not consistent with agency theory and prospect theory, but is consistent with the results of Green (2015). The sensitivity analysis of this result suggests that, the increase in the fair value volatility, the asking sales price and the probability of sales below the current fair value has not increased and did not reduce the lowest acceptable price.
Keywords: Manager Discretion, Conservatism, Fair Value Volatility, Investment Selling Decisions.
1- Introduction
Accounting academics and practitioners have been debating the reliability and relevance of fair value accounting. According to Financial Accounting Standards, fair value accounting, often referred to as mark-to-market occurs when a firm revalues assets and liabilities based on an exit price. Advocates contend that fair value provides valuable and timely information to financial statement users by increasing transparency that aid in assessing firm value. In contrast, opponents argue that fair value is transitory because once the asset or liability is traded, the related accounting entries are reversed (Green, 2015). Thus, fair value may provide misleading and unreliable information. In particular, Level 3 fair value assets have no observable inputs and are valued by managers’ assumptions, thus the fair value is subjective (Zyla, 2013).
Level 3 fair values are unique in that subjective assumptions that are necessary to arrive at the fair value are based on unobservable inputs. According to the IASB codification glossary, unobservable inputs are defined as “market data that are not available and that are developed using the best information available about the assumptions that market participants would use 2 when pricing the asset or liability”. Depending on the valuation method selected, discretion can include the expected life of the asset or liability, the cash discount rate, and risk return rates (Zyla, 2013). This discretion can affect financial statements.
Prior reserch has established that factors such as earnings management (Dechow and Shakespear, 2009, Dechow et al, 2010), optimism (Kedia and Philippon, 2009), national culture (Ball et al., 2000), fear of litigation (Lobo and Zhou, 2006), and auditor compliance (Milbradt 2012) influence the recognized fair value. However, limited research has examined how managerial behavioral effects prior to recognizing fair value (Chen et al., 2013, Green, 2015).
Motivated reasoning theory contends that individuals will perceive information in a manner that will benefit their desired outcome (Kunda 1990). Thus, managers are likely to view a fair value that results in gains as a valid representation of the true underlying value. Because of the resulting unrealized gains, managers will be motivated to base Level 3 fair value selling decisions at the fair valuation amount (Green, 2015).
When examining manager’s likelihood to sell a Level 3 fair value asset or liability, prospect theory (Kahneman and Tversky, 1979) suggests that only unrealized gain from the increase of the recognized fair value will motivate managers to be risk averse. In order to preserve the unrealized gain, managers will not sell the asset or liability if the market offers a price less than the most recent recognized fair value (Green, 2015).
2- Research hypotheses
Based on theoretical foundations and research background, the research hypotheses can be expressed as follows:
H1: The conservative level used in the assessment of fair value affects the decision to sell investment at the 3 level of fair value.
H2: The level of historical volatility of fair value affects the decision to sell investment at the 3 level of fair value.
H3: The interaction of the level of conservatism and the level of historical volatility of fair value, affects the decisio to sell investment at the 3 level of fair value.
3- Methods
This research in terms of purpose is a fundamental research, in terms of method is quasi-empirical and in the point of data collection is survey. In this research, to test the research hypotheses, a questionnaire based on the scenario was used. This questionnaire is based on Green (2015). The statistical population consists of all active financial analysts in investment companies and stock exchange brokers and the statistical sample of the study was determined using the sample size tables of Cohen et al. (2000) of 268 people. Multivariate analysis of variance (MANOVA) and univariate analysis of variance (ANOVA) were used to analyze the data and test hypotheses.
4- Results
The results of this study showed that conservatism and its interaction with the fair value volatility have a significant effect on the investment selling decisions based on fair value. However, the fair value volatility has no significant effect on these decisions. The other results showed that financial analysts' demographic characteristics do not have a significant effect on investment decision-making. Overall, the results of the research showed that the directors' discretions in fair value accounting affects investment selling decisions.
5- Discussion and conclusion
Findings of the research indicate that with the increase in the level of conservatism used in the assessment of fair value, managers' willingness to sell investments increases. This result is consistent with the motivated reasoning and the prospect theory. The results of this study are consistent with the results of Green (2015). In addition, the results of the research showed that the historical volatility of fair value does not affect the decision of investment sales. This result is not consistent with agency theory and prospect theory, but is consistent with the results of Green (2015). The sensitivity analysis of this result suggests that, the increase in the fair value volatility, the asking sales price and the probability of sales below the current fair value has not increased and did not reduce the lowest acceptable price.
Keywords: Manager Discretion, Conservatism, Fair Value Volatility, Investment Selling Decisions.
2020
Publication Date: 2020/12/21
پیشرفت های حسابداری (20089988)(2)pp. 159-190
Journal of Accounting Advances, (2020) 12(1): 1-27
DOI: 10.22099/JAA.2021.40327.2124
Journal of Accounting Advances (JAA)
Journal homepage: www.jaa.shirazu.ac.ir/?lang=en
The effect of Earnings Co-movement on Quarterly Earnings Response Coefficient
Narges Hamidian1
1. Assistant Professor, Department of Accounting, Faculty of Administrative Sciences and Economics, University of Isfahan
ARTICLE INF
ABSTRACT
Received: 2021-04-12
Accepted: 2021-06-22
Prior literature shows that a firm’s earnings tend to move with other firms in the same industry. This concept is called co-movement. So investors will be able to form an expectation of a firm’s earnings from the industry. Given that the reported earnings do reflect the flow of information to the market, the purpose of this study is investigating the effect of earnings co-movement on quarterly earnings response coefficient. The sample of this study consists of 134 listed companies in Tehran Stock Exchange during the period 2008 to 2019. The results of the first hypothesis showed that the response coefficients to quarterly earnings announcement have a positive and significant relationship with the buy and hold returns in the three-day earnings announcement window, and earnings co-movement weakens this relationship. Also, the results of testing the second and third hypotheses showed that when there is good news, earnings co-movement weakens earnings response coefficient, but under bad news, earnings co-movement has no effect on earnings response coefficient.
* Corresponding author:
Narges Hamidian
Assistant Professor, Department of Accounting, Faculty of Administrative Sciences and Economics, University of Isfahan
Email: n.hamidian@ase.ui.ac.ir
1- Introduction
Prior literature shows that firms’ earnings tend to co-move together, so investors will be able to form an expectation of a firm’s earnings from the market (Brown and Ball, 1967). This concept is called co-movement. Given that there is a significant relationship between a firm’s earnings and the earnings of other firms in the market, and the reported earnings do reflect the flow of information to the market, the question is whether this relationship has an effect on earnings informativeness?
There are two different views about how earnings co-movement impacts earnings response coefficient (earnings informativeness). First, some studies imply the higher the degree of earnings co-movement of a firm with other firms in same industry, the less informative that firm’s earnings release will be. In other words, investors will be able to predict a firm’s earnings by using similar firms in the same industry and so there will be less uncertainty about that firm’s earnings (see, e.g. Fischer and Verrecchia, 2000; Jackson et al, 2020). Second, some other papers (such as Heinle and Verrecchia, 2016 and Jackson et al., 2017) show that the more the earnings of a firm co-move with the industry and market, the less likely it is that the firm will issue a biased earnings report. So, the earnings will be more informative to investors.
Therefore, this study attempts to investigate the effect of earnings co-movement on quarterly earnings response coefficient. Also, because of the behavioral biases of investors in reaction to good and bad news, the effect of earnings co-movement on quarterly earnings response coefficient with considering good and bad news has also been investigated.
2- Hypothesis
According to the literature, the research hypotheses include:
Earnings co-movement weakens response coefficient to quarterly earnings announcement.
Under good news, earnings co-movement weakens response coefficient to quarterly earnings announcement.
Under bad news, earnings co-movement strengthens the response coefficient to quarterly earnings announcement.
3- Methods
In this study, in order to calculate the variables and test the hypotheses, required data has been collected from the annual and quarterly financial statements and its footnotes of listed companies in the Tehran Stock Exchange and the existing databases including “Rahavard Novin” and “Codal”. The sample of this study consists of 134 listed companies in Tehran Stock Exchange during 2008 to 2019. To test this hypotheses, the period of 8 years (2012 to 2019) and panel data methods have been used.
4- Results
The results of investigating the first hypothesis showed that the response coefficients to quarterly earnings announcement have a positive and significant relationship with the buy and hold returns in the three-day earnings announcement window, and earnings co-movement weakens this relationship. Also, the results of testing the second and third hypotheses showed that when there is good news, earnings co-movement weakens earnings response coefficient, but under bad news, earnings co-movement has no effect on earnings response coefficient.
5- Discussion and Conclusion
In this paper we investigated the informativeness of a firm’s earnings in the presence of information about other firms’ earnings (i.e., earnings co-movement). Some literatures show the greater the degree of co-movement, the less relevant earnings become as investors do not need to rely on the information signal from the firm because they can predict earnings from alternative sources in the same industry. On the other hand, some studies imply the greater the degree of co-movements, the less opportunity managers have to bias the earnings signal which will lead to the earnings becoming more reliable and more informative.
The results of investigating the first hypothesis showed that the response coefficients to quarterly earnings announcement have a positive and significant relationship with the buy and hold returns and when earnings co-movement is considered, the quarterly earnings response coefficient decreases. This means that when earnings’ firms move with other firms in the same industry, investors can get information from other firms in the industry and better predict the earnings’ firm. So, earnings announcement will contain less unexpected information. As a result, earnings response coefficient decreases. This result is consistent with Jackson et al., (2020).
The results of testing the second hypothesis indicates that when there is good news, earnings co-movement weakens earnings response coefficient. This implies that investors pay more attention to the good news of the industry and react less to the earnings when good news is published by the firm. But the results of testing the third hypothesis showed under bad news, earnings co-movement has no effect on earnings response coefficient. This lack of relationship may be due to the fact that investors do not pay much attention to the bad news of the industry.
For future studies, we suggest to analyze the relationship between co-movement and other variables such as comparability of financial statements, earnings quality, earnings management, fraud, etc. The results of this research can also be done separately by industry to determine in which industries there is more co-movement.
DOI: 10.22099/JAA.2021.40327.2124
Journal of Accounting Advances (JAA)
Journal homepage: www.jaa.shirazu.ac.ir/?lang=en
The effect of Earnings Co-movement on Quarterly Earnings Response Coefficient
Narges Hamidian1
1. Assistant Professor, Department of Accounting, Faculty of Administrative Sciences and Economics, University of Isfahan
ARTICLE INF
ABSTRACT
Received: 2021-04-12
Accepted: 2021-06-22
Prior literature shows that a firm’s earnings tend to move with other firms in the same industry. This concept is called co-movement. So investors will be able to form an expectation of a firm’s earnings from the industry. Given that the reported earnings do reflect the flow of information to the market, the purpose of this study is investigating the effect of earnings co-movement on quarterly earnings response coefficient. The sample of this study consists of 134 listed companies in Tehran Stock Exchange during the period 2008 to 2019. The results of the first hypothesis showed that the response coefficients to quarterly earnings announcement have a positive and significant relationship with the buy and hold returns in the three-day earnings announcement window, and earnings co-movement weakens this relationship. Also, the results of testing the second and third hypotheses showed that when there is good news, earnings co-movement weakens earnings response coefficient, but under bad news, earnings co-movement has no effect on earnings response coefficient.
* Corresponding author:
Narges Hamidian
Assistant Professor, Department of Accounting, Faculty of Administrative Sciences and Economics, University of Isfahan
Email: n.hamidian@ase.ui.ac.ir
1- Introduction
Prior literature shows that firms’ earnings tend to co-move together, so investors will be able to form an expectation of a firm’s earnings from the market (Brown and Ball, 1967). This concept is called co-movement. Given that there is a significant relationship between a firm’s earnings and the earnings of other firms in the market, and the reported earnings do reflect the flow of information to the market, the question is whether this relationship has an effect on earnings informativeness?
There are two different views about how earnings co-movement impacts earnings response coefficient (earnings informativeness). First, some studies imply the higher the degree of earnings co-movement of a firm with other firms in same industry, the less informative that firm’s earnings release will be. In other words, investors will be able to predict a firm’s earnings by using similar firms in the same industry and so there will be less uncertainty about that firm’s earnings (see, e.g. Fischer and Verrecchia, 2000; Jackson et al, 2020). Second, some other papers (such as Heinle and Verrecchia, 2016 and Jackson et al., 2017) show that the more the earnings of a firm co-move with the industry and market, the less likely it is that the firm will issue a biased earnings report. So, the earnings will be more informative to investors.
Therefore, this study attempts to investigate the effect of earnings co-movement on quarterly earnings response coefficient. Also, because of the behavioral biases of investors in reaction to good and bad news, the effect of earnings co-movement on quarterly earnings response coefficient with considering good and bad news has also been investigated.
2- Hypothesis
According to the literature, the research hypotheses include:
Earnings co-movement weakens response coefficient to quarterly earnings announcement.
Under good news, earnings co-movement weakens response coefficient to quarterly earnings announcement.
Under bad news, earnings co-movement strengthens the response coefficient to quarterly earnings announcement.
3- Methods
In this study, in order to calculate the variables and test the hypotheses, required data has been collected from the annual and quarterly financial statements and its footnotes of listed companies in the Tehran Stock Exchange and the existing databases including “Rahavard Novin” and “Codal”. The sample of this study consists of 134 listed companies in Tehran Stock Exchange during 2008 to 2019. To test this hypotheses, the period of 8 years (2012 to 2019) and panel data methods have been used.
4- Results
The results of investigating the first hypothesis showed that the response coefficients to quarterly earnings announcement have a positive and significant relationship with the buy and hold returns in the three-day earnings announcement window, and earnings co-movement weakens this relationship. Also, the results of testing the second and third hypotheses showed that when there is good news, earnings co-movement weakens earnings response coefficient, but under bad news, earnings co-movement has no effect on earnings response coefficient.
5- Discussion and Conclusion
In this paper we investigated the informativeness of a firm’s earnings in the presence of information about other firms’ earnings (i.e., earnings co-movement). Some literatures show the greater the degree of co-movement, the less relevant earnings become as investors do not need to rely on the information signal from the firm because they can predict earnings from alternative sources in the same industry. On the other hand, some studies imply the greater the degree of co-movements, the less opportunity managers have to bias the earnings signal which will lead to the earnings becoming more reliable and more informative.
The results of investigating the first hypothesis showed that the response coefficients to quarterly earnings announcement have a positive and significant relationship with the buy and hold returns and when earnings co-movement is considered, the quarterly earnings response coefficient decreases. This means that when earnings’ firms move with other firms in the same industry, investors can get information from other firms in the industry and better predict the earnings’ firm. So, earnings announcement will contain less unexpected information. As a result, earnings response coefficient decreases. This result is consistent with Jackson et al., (2020).
The results of testing the second hypothesis indicates that when there is good news, earnings co-movement weakens earnings response coefficient. This implies that investors pay more attention to the good news of the industry and react less to the earnings when good news is published by the firm. But the results of testing the third hypothesis showed under bad news, earnings co-movement has no effect on earnings response coefficient. This lack of relationship may be due to the fact that investors do not pay much attention to the bad news of the industry.
For future studies, we suggest to analyze the relationship between co-movement and other variables such as comparability of financial statements, earnings quality, earnings management, fraud, etc. The results of this research can also be done separately by industry to determine in which industries there is more co-movement.
2021
Introduction
Empirical evidence suggests the existence of a glass ceiling in the accounting profession. Glass ceiling beliefs in women have important effects on career outcomes such as job satisfaction, organizational commitment, and turnover intentions. That is, to the extent that women believe that there is a glass ceiling, their commitment to the workplace diminishes and they lose their motivation to upgrade their empowerment, which can lead to turnover intentions (Cohen et al., 2020). Glass ceiling beliefs can be so strong that women leave the institution even before they hit the glass ceiling (Lupu, 2012). However, leaving the organization is one of the most costly events that occur in auditing firms and makes the firm incur high tangible and intangible costs (Ganji and Arab Mazar Yazdi, 2021).
Accordingly, the aim of this study is to investigate the effect of female auditors’ glass ceiling beliefs on turnover intentions by considering the mediating role of psychological empowerment.
Research Hypotheses
In this research, based on the theoretical foundations and previous research, the following hypotheses are presented:
H1: Denial has a positive and significant effect on the psychological empowerment of female auditors.
H2: Resilience has a positive and significant effect on the psychological empowerment of female auditors.
H3: Resignation has a negative and significant effect on the psychological empowerment of female auditors.
H4: Acceptance has a negative and significant effect on the psychological empowerment of female auditors.
H5: Psychological empowerment of female auditors has a negative and significant effect on tenure intentions.
H6: Psychological empowerment mediates the relationship between denial and tenure intentions.
H7: Psychological empowerment mediates the relationship between resilience and tenure intentions.
H8: Psychological empowerment mediates the relationship between resignation and tenure intentions.
H 9: Psychological empowerment mediates the relationship between acceptance and tenure intentions.
Methods
A structured questionnaire was used to gather the data for this study. The statistical population of the study consists of female auditors working in member institutions of the Iranian Association of Certified Public Accountants (IACPA). Out of the more than 400 online questionnaires that were sent out, 116 usable responses were returned.
The questionnaire contained two sections. Section A consisted of questions to gain demographic information about the respondents, such as organizational position, work experience, marital status, and age. Section B contained questions related to glass ceiling beliefs, psychological empowerment, and tenure intentions. In order to measure the constructs of denial, resilience, resignation, and acceptance, which are considered as components of glass ceiling beliefs, Smith et al.'s Career Path Survey (2012) was used. Tenure intentions were measured by four items that were adapted from Dalton et al. (2014) and Gim and Ramayah (2020). Finally, psychological empowerment was measured using a six-item questionnaire adopted from Spritzer (1995). In this study, hypotheses testing was conducted by using SmartPLS 3.
Results
This study evaluated the structural model by examining the significance of path coefficients, effect size ( ), coefficient of determination ( ), and variance inflation factor (VIF). It was found H1 was supported, indicating that denial maintains a positive and significant effect on the psychological empowerment of female auditors (b= 0.230, t= 2.219, p= 0.027, 0.042). Resilience also has a significant positive influence on the psychological empowerment of female auditors (b= 0.256, t= 2.337, p= 0.020, 0.070), thus H2 was supported. The results revealed that resignation has no significant effect on the psychological empowerment of female auditors (b= -0.134, t= 1.136, p= 0.256, 0.014), indicating no support for H3. As for H4, in which it was hypothesized that acceptance would have a negative influence on the psychological empowerment of female auditors, the results showed a significant and negative relationship (b = -0.247, t = 2.279, p= 0.023, 0.076). Therefore, H4 was supported. In regards to H5, in which it was hypothesized that psychological empowerment would negatively influence tenure intention, the results also supported this relationship (b= -0.465, t= 5.324, p= 0.000, 0.276).
Also, this study examined the mediating effects of psychological empowerment on the relationships between the four elements of the glass ceiling beliefs and turnover intentions. The findings reveal that there is an indirect mediation (full mediation) effect of psychological empowerment on the relationship between denial (b = -0.107, t = 2.065, p= 0.039) and turnover intentions. Therefore, H6 was supported. There is an indirect mediation effect on the relationship between the resilience (b = -0.119, t = 1.964, p= 0.050) and turnover intentions, thus H7 was supported. The results of testing the eighth and ninth hypotheses indicate that constructs of resignation (b = 0.062, t = 1.189, p= 0.235) and acceptance (b = 0.115, t = 1.757, p= 0.080) due to psychological empowerment do not have a significant effect on turnover intentions. Thus, H8 and H9 were not supported.
Discussion and Conclusion
The aim of the present study was to investigate the effect of female auditors' glass ceiling beliefs on turnover intentions by considering the mediating variable role of psychological empowerment. In order to achieve this goal, nine hypotheses were proposed. The results of testing the hypotheses indicate the positive and significant effect of denial and resilience and the negative and significant effect of acceptance on the psychological empowerment of female auditors. The results also show that the constructs of denial and resilience through the construct of psychological empowerment have an effect on the turnover intentions, but the indirect effect of resignation and acceptance on the turnover intentions is not significant.
The results of this study indicate that part of the higher tendency of female auditors to leave auditing firms than male auditors can be attributed to the beliefs of the glass ceiling. The results of this study show that it is important to pay attention to the beliefs of glass ceiling and create solutions to reduce these beliefs in order to optimally manage human resources.
Keywords: Glass Ceiling Beliefs, Psychological Empowerment, Turnover Intentions, Female Auditors.
Empirical evidence suggests the existence of a glass ceiling in the accounting profession. Glass ceiling beliefs in women have important effects on career outcomes such as job satisfaction, organizational commitment, and turnover intentions. That is, to the extent that women believe that there is a glass ceiling, their commitment to the workplace diminishes and they lose their motivation to upgrade their empowerment, which can lead to turnover intentions (Cohen et al., 2020). Glass ceiling beliefs can be so strong that women leave the institution even before they hit the glass ceiling (Lupu, 2012). However, leaving the organization is one of the most costly events that occur in auditing firms and makes the firm incur high tangible and intangible costs (Ganji and Arab Mazar Yazdi, 2021).
Accordingly, the aim of this study is to investigate the effect of female auditors’ glass ceiling beliefs on turnover intentions by considering the mediating role of psychological empowerment.
Research Hypotheses
In this research, based on the theoretical foundations and previous research, the following hypotheses are presented:
H1: Denial has a positive and significant effect on the psychological empowerment of female auditors.
H2: Resilience has a positive and significant effect on the psychological empowerment of female auditors.
H3: Resignation has a negative and significant effect on the psychological empowerment of female auditors.
H4: Acceptance has a negative and significant effect on the psychological empowerment of female auditors.
H5: Psychological empowerment of female auditors has a negative and significant effect on tenure intentions.
H6: Psychological empowerment mediates the relationship between denial and tenure intentions.
H7: Psychological empowerment mediates the relationship between resilience and tenure intentions.
H8: Psychological empowerment mediates the relationship between resignation and tenure intentions.
H 9: Psychological empowerment mediates the relationship between acceptance and tenure intentions.
Methods
A structured questionnaire was used to gather the data for this study. The statistical population of the study consists of female auditors working in member institutions of the Iranian Association of Certified Public Accountants (IACPA). Out of the more than 400 online questionnaires that were sent out, 116 usable responses were returned.
The questionnaire contained two sections. Section A consisted of questions to gain demographic information about the respondents, such as organizational position, work experience, marital status, and age. Section B contained questions related to glass ceiling beliefs, psychological empowerment, and tenure intentions. In order to measure the constructs of denial, resilience, resignation, and acceptance, which are considered as components of glass ceiling beliefs, Smith et al.'s Career Path Survey (2012) was used. Tenure intentions were measured by four items that were adapted from Dalton et al. (2014) and Gim and Ramayah (2020). Finally, psychological empowerment was measured using a six-item questionnaire adopted from Spritzer (1995). In this study, hypotheses testing was conducted by using SmartPLS 3.
Results
This study evaluated the structural model by examining the significance of path coefficients, effect size ( ), coefficient of determination ( ), and variance inflation factor (VIF). It was found H1 was supported, indicating that denial maintains a positive and significant effect on the psychological empowerment of female auditors (b= 0.230, t= 2.219, p= 0.027, 0.042). Resilience also has a significant positive influence on the psychological empowerment of female auditors (b= 0.256, t= 2.337, p= 0.020, 0.070), thus H2 was supported. The results revealed that resignation has no significant effect on the psychological empowerment of female auditors (b= -0.134, t= 1.136, p= 0.256, 0.014), indicating no support for H3. As for H4, in which it was hypothesized that acceptance would have a negative influence on the psychological empowerment of female auditors, the results showed a significant and negative relationship (b = -0.247, t = 2.279, p= 0.023, 0.076). Therefore, H4 was supported. In regards to H5, in which it was hypothesized that psychological empowerment would negatively influence tenure intention, the results also supported this relationship (b= -0.465, t= 5.324, p= 0.000, 0.276).
Also, this study examined the mediating effects of psychological empowerment on the relationships between the four elements of the glass ceiling beliefs and turnover intentions. The findings reveal that there is an indirect mediation (full mediation) effect of psychological empowerment on the relationship between denial (b = -0.107, t = 2.065, p= 0.039) and turnover intentions. Therefore, H6 was supported. There is an indirect mediation effect on the relationship between the resilience (b = -0.119, t = 1.964, p= 0.050) and turnover intentions, thus H7 was supported. The results of testing the eighth and ninth hypotheses indicate that constructs of resignation (b = 0.062, t = 1.189, p= 0.235) and acceptance (b = 0.115, t = 1.757, p= 0.080) due to psychological empowerment do not have a significant effect on turnover intentions. Thus, H8 and H9 were not supported.
Discussion and Conclusion
The aim of the present study was to investigate the effect of female auditors' glass ceiling beliefs on turnover intentions by considering the mediating variable role of psychological empowerment. In order to achieve this goal, nine hypotheses were proposed. The results of testing the hypotheses indicate the positive and significant effect of denial and resilience and the negative and significant effect of acceptance on the psychological empowerment of female auditors. The results also show that the constructs of denial and resilience through the construct of psychological empowerment have an effect on the turnover intentions, but the indirect effect of resignation and acceptance on the turnover intentions is not significant.
The results of this study indicate that part of the higher tendency of female auditors to leave auditing firms than male auditors can be attributed to the beliefs of the glass ceiling. The results of this study show that it is important to pay attention to the beliefs of glass ceiling and create solutions to reduce these beliefs in order to optimally manage human resources.
Keywords: Glass Ceiling Beliefs, Psychological Empowerment, Turnover Intentions, Female Auditors.