Investigating the effect of profit management incentives on cost stickiness (companies admitted to Tehran Stock Exchange)

Number of pages: 107 File Format: word File Code: 29756
Year: 2014 University Degree: Master's degree Category: Librarianship
  • Part of the Content
  • Contents & Resources
  • Summary of Investigating the effect of profit management incentives on cost stickiness (companies admitted to Tehran Stock Exchange)

    Master's Thesis in Accounting

    Abstract

    Knowing the cost behavior in response to changes in production and sales levels is very important for company management. In the common and traditional model of cost behavior, variable costs change in proportion to changes in the level of activity, meaning that the amount of change in costs depends only on the amount of change in the level of activity and not on the direction of change. But a new theory about the behavior of costs indicates that the percentage increase in costs with an increase in the volume of activity is greater than the percentage decrease in costs as a result of a decrease in the same volume of activity. This type of cost behavior is known as "cost stickiness". Several factors are effective on cost stickiness.

    The purpose of this research is to investigate the effect of profit management incentives on cost stickiness in companies listed on the Tehran Stock Exchange. For this purpose, two hypotheses have been presented that test and analyze the relationship between profit management incentives and cost stickiness. The statistical population includes all companies admitted to the Tehran Stock Exchange during a 5-year period from 1387 to 1391. From the entire society, 138 companies have been selected and investigated using the systematic elimination sampling method. In order to check the hypotheses, regression analysis using the panel data method has been used. The results show that there is a significant relationship between profit management incentives and cost stickiness in the years under review. In other words, profit management incentives reduce cost stickiness in companies. Therefore, the activities that are carried out in order to understand the factors that determine the cost structure of companies, should be based on the motivations of managers in making decisions related to the costs and resources of these companies, especially the motivations caused by agency.

    Title

    Page Title

    Chapter One: Research Generality. 12

    Introduction. 2

    1-1. Defining the topic and stating the research problem. 2

    1-2. The importance and necessity of research. 3

    1-3. Research objectives. 4

    1-4. Research questions. 4

    1-5. Research hypotheses. 5

    1-6. Research method. 5

    1-6-1. Research variables. 5

    1-7. Scope of research. 7

    1-8. Population and statistical sample. 7

    1-9. Method of collecting data and information. 8

    1-10. Statistical methods and hypothesis testing 8

    1-11. Definition of words and terms. 9

    1-12. The overall structure of the research. 10

    Chapter Two: Literature and theoretical foundations of research. 11

    Introduction. 12

    2-1. Theoretical foundations. 13

    2-1-1. Cost behavior analysis 13

    2-1-2. Stickiness of costs 15

     

     

    2-1-2-1. The concept of cost stickiness 16

    2-1-2-2. Cost stickiness theories 17

    2-1-3. Profit management. 18

    2-1-3-1. Representation theory. 18

    2-1-3-2. The concept of profit management. 22

    2-1-3-3. Profit management methods. 26

    2-1-3-3-1. Profit management through discretionary accruals. 26

    2-1-3-3-2. Profit management through real activities. 26

    2-1-3-3-3. Activities and factors influencing profit manipulation through real activities: 27

    2-1-3-4. Motives of profit management. 29

    2-1-4. Cost stickiness and profit management incentives. 32

    2-2. Research background. 34

    2-2-1. A review of foreign research. 34

    2-2-2. A review of domestic research. 39

    2-2-3. Abstracts of the conducted research 41

    Chapter three: research method. 47

    Introduction. 48

    3-1. Research method. 48

    3-2. Data collection methods and tools 48

    3-3. Scope of research. 48

    3-4. Society and a statistical sample. 49

    3-5. Research problem design. 49

     

     

    3-6. Research hypotheses. 50

    3-7. Statistical model of research. 51

    3-8. How to calculate research variables. 52

    3-8-1. dependent variable. 52

    3-8-2. independent variables. 52

    3-8-3. control variables. 52

    3-9.. Model estimation method. 54

    3-9-1. Tabular data. 54

    3-9-2. Panel data model estimation methods. 55

    3-9-2-1. Pooled least squares method (pls): 55

    3-9-2-2. Fixed effects model (least square model with dummy variable) (LSDV): 55

    3-9-2-3. Random effect model. 56

    3-9-2-4. Random parameter model. 56

    3-9-3. Tabular data pattern tests: 57

    3-9-3-1. Chow's test 57

    3-9-3-2. Hausman test. 57

    3-9-4. Manai test in panel data. 58

    3-9-5. Cointegration test in panel data. 58

    3-9-6. Error independence test 59

    3-9-7. General significance test of regression and coefficients. 59

    3-10. Summary of the third chapter. 59

    Chapter four: analysis of findings 60

     

     

    Introduction. 61

    4-1. Descriptive statistics. 61

    4-2. Diagnostic tests on data 62

    4-2-1. Mana test. 62

    4-2-2. Collaborative test. 63

    4-2-3. Chow's test 64

    4-3. Estimation of the model and analysis of the results. 65

    4-3-1. Examining the research model for loss avoidance motivation and its results. 65

    4-3-2. Examining the research model for the motivation to avoid profit reduction and its results. 66

    4-3-3. Testing the motivational model of avoiding losses or reducing profits and its results. 67

    4-4. Summary of the chapter. 69

    Chapter five: conclusions and suggestions. 70

    Introduction. 71

    5-1. Discussion and conclusion. 71

    5-2. Research limitations. 72

    5-3. Suggestions from the research results. 73

    5-4. Suggestions for future research. 73

    List of sources and sources. 74

    Appendix. 81

     

     

     

     

    List of tables

    Title                                                                                                                                                                                                                                                          . 6

    Table (1-2): Abstracts of foreign researches. 41

    Table (2-2): Abstracts of internal researches. 44

    Table (1-3): Summary of research variables. 53

    Table (1-4): Descriptive statistics related to research variables. 61

    Table (4-2): The results of the Manai test related to the research variables. 62

    Table (3-4): Examining the coexistence of research variables in the model. 63

    Table (4-4): Chow test results. 64

    Table (4-5): The results of the research model test for the motivation to avoid losses. 65

    Table (4-6): The results of the research model test for the motivation to avoid profit reduction. 66

    Table (7-4): The results of the research model test for the motivation of avoiding losses or reducing profits. 68

    Table (5-1): Summarizing the results of hypothesis testing 72

    Figure (2-1): Relationship between representative (manager) and owner (shareholder) in the framework of agency theory. 19

     

     

     

     

     

     

     

    List of attachments

    Title                                                                                                                                                                                                                                page 82

    Appendix 2: Descriptive statistics. 83

    Appendix 3: Manai tests.

  • Contents & References of Investigating the effect of profit management incentives on cost stickiness (companies admitted to Tehran Stock Exchange)

    List:

    Table of Contents

    Page Title

    Chapter One: General Research. 12

    Introduction. 2

    1-1. Defining the topic and stating the research problem. 2

    1-2. The importance and necessity of research. 3

    1-3. Research objectives. 4

    1-4. Research questions. 4

    1-5. Research hypotheses. 5

    1-6. Research method. 5

    1-6-1. Research variables. 5

    1-7. Scope of research. 7

    1-8. Population and statistical sample. 7

    1-9. Method of collecting data and information. 8

    1-10. Statistical methods and hypothesis testing 8

    1-11. Definition of words and terms. 9

    1-12. The overall structure of the research. 10

    Chapter Two: Literature and theoretical foundations of research. 11

    Introduction. 12

    2-1. Theoretical foundations. 13

    2-1-1. Cost behavior analysis 13

    2-1-2. Stickiness of costs 15

    2-1-2-1. The concept of cost stickiness 16

    2-1-2-2. Cost stickiness theories 17

    2-1-3. Profit management. 18

    2-1-3-1. Representation theory. 18

    2-1-3-2. The concept of profit management. 22

    2-1-3-3. Profit management methods. 26

    2-1-3-3-1. Profit management through discretionary accruals. 26

    2-1-3-3-2. Profit management through real activities. 26

    2-1-3-3-3. Activities and factors influencing profit manipulation through real activities: 27

    2-1-3-4. Motives of profit management. 29

    2-1-4. Cost stickiness and profit management incentives. 32

    2-2. Research background. 34

    2-2-1. A review of foreign research. 34

    2-2-2. A review of domestic research. 39

    2-2-3. Abstracts of the conducted research 41

    Chapter three: research method. 47

    Introduction. 48

    3-1. Research method. 48

    3-2. Data collection methods and tools 48

    3-3. Scope of research. 48

    3-4. Society and a statistical sample. 49

    3-5. Research problem design. 49

    3-6. Research hypotheses. 50

    3-7. Statistical model of research. 51

    3-8. How to calculate research variables. 52

    3-8-1. dependent variable. 52

    3-8-2. independent variables. 52

    3-8-3. control variables. 52

    3-9. Model estimation method. 54

    3-9-1. Tabular data. 54

    3-9-2. Panel data model estimation methods. 55

    3-9-2-1. Pooled least squares method (pls): 55

    3-9-2-2. Fixed effects model (least square model with dummy variable) (LSDV): 55

    3-9-2-3. Random effect model. 56

    3-9-2-4. Random parameter model. 56

    3-9-3. Tabular data pattern tests: 57

    3-9-3-1. Chow's test 57

    3-9-3-2. Hausman test. 57

    3-9-4. Manai test in panel data. 58

    3-9-5. Cointegration test in panel data. 58

    3-9-6. Error independence test 59

    3-9-7. General significance test of regression and coefficients. 59

    3-10. Summary of the third chapter. 59

    Chapter four: analysis of findings 60

    Introduction. 61

    4-1. Descriptive statistics. 61

    4-2. Diagnostic tests on data 62

    4-2-1. Mana test. 62

    4-2-2. Collaborative test. 63

    4-2-3. Chow's test 64

    4-3. Estimation of the model and analysis of the results. 65

    4-3-1. Examining the research model for loss avoidance motivation and its results. 65

    4-3-2. Examining the research model for the motivation to avoid profit reduction and its results. 66

    4-3-3. Testing the motivational model of avoiding losses or reducing profits and its results. 67

    4-4. Summary of the chapter. 69

    Chapter five: conclusions and suggestions. 70

    Introduction. 71

    5-1. Discussion and conclusion. 71

    5-2. Research limitations. 72

    5-3. Suggestions from the research results. 73

    5-4. Suggestions for future research. 73

    List of sources and sources. 74

    Appendix. 81

    Source:

    List of sources and sources

    A) Internal sources:

    Ebrahimi, Shahla and Ebrahimi Mehrdad (1391). Profit management, motivations and solutions, Quarterly Journal of Accounting and Auditing Studies, No. 1, 149-Profit management, motivations and solutions, accounting and auditing quarterly, number 1, 124-149.

    Ebrahimi Kardler, Ali and Zakari, Hamed (2008), examining profit management using the sale of assets. Journal of accounting research, third issue, pp. 135-123.

    Izdinia, Nasser, Rabiei, Hamed and Hamidian, Narges (2012). Investigating the relationship between financial leverage and real profit management of companies listed on the Tehran Stock Exchange. Advances in Shiraz University accounting. pp. 33-54.

    Baharmghaddam, Mahdi and Hasnifard, Habiba (2009). Investigating the relationship between real financial events and profit management in companies listed on the Tehran Stock Exchange. Accounting and auditing reviews, number 6: 12-43.

    Pertoi, Nasser and Abshirini, Elham (2012). Investigating the relationship between real profit management and profit accounting management from the point of view of profit smoothing. Accounting and auditing research. No. 17, 144-158.

    Pourhaidari, Omid and Hemmati, Daud. (1383).  Investigating the effect of debt contracts, political costs, bonus and ownership plans on profit management in companies listed on the Tehran Stock Exchange.  Accounting and auditing reviews, 11th year, number 36, pp. 47-63.

    Pourreza, Mohammad Reza (2010). Examining the multivariable model for predicting stock returns in Tehran Stock Exchange. Master's thesis. Imam Sadiq University.

    Thaghafi, Ali and Pouriansab, Amir (2009). Profit management theory. Quarterly Journal of Accounting and Auditing Research, No. 6, p. 162.

    Khaleqi Moghadam, Hamid and Karmi, Farouq (2007). Profit forecasting using a model based on cost variability and stickiness. Accounting Studies, Vol. 23, pp. 19-41.

    Dastgir, Mohsen (2011). Fake accounting and financial scandals of American companies. Accountant, No. 150, pages 16-20.

    Rokhshani, Mohammad Hossein (2004). Profit management tools in companies admitted to the stock exchange. Bours Monthly, No. 48, pp. 56-51. Riahi Belkowi, Ahmed (1381). Accounting theories, (translated by Ali Parsaian), Cultural Research Office Publications, first edition.

    Zanjirdar, Majid, Ghafari Ashtiani, Peyman and Madaghi, Zahra (2012). Investigating and analyzing factors affecting the behavior of cost stickiness. Management accounting scientific research quarter, number 20, pp. 79-91.

    Sepasi, Sahar, Fathi, Zahra and Shaibeh, Sakineh (2012). Experimental test of cost stickiness: Evidence from Tehran Stock Exchange. Experimental Accounting Research, No. 12, pp. 163-177.

    Sajadi, Seyed Hossein, Hajizadeh, Saeed and Nikkar, Javad (2014). The effect of cost stickiness on the temporal symmetry of profit with an emphasis on the relationship between cost stickiness and conditional conservatism. Journal of Accounting Knowledge, No. 16, pp. 81-99. Qaemi, Mohammad Hossein and Nematalahi, Masoumeh (2015). Investigating the behavior of distribution and sales, general and administrative costs and the total price in Tehran Stock Exchange. Accounting Studies Quarterly, 16: 71-89.

    Qaemi, Mohammad Hossein and Nematalahi, Masoumeh (2016). The behavior and structure of operating costs and financial costs in production companies admitted to the Tehran Stock Exchange. Accounting Studies Quarterly, 30: 16-29.

    Kurdestani, Gholamreza and Mortezavi, Seyed Morteza (2011). Identifying the factors that determine the stickiness of companies' costs. Financial Accounting Research, No. 13, 13-32.

    Kordestani, Gholamreza and Mortazavi, Seyed Morteza (2011). Investigating the effect of managers' considered decisions on cost stickiness. Accounting and auditing reviews, period 19, number 67, 90-73.

    Moradzadefar, Mehdi and Adili, Mojtabi (2009). Investigating the relationship between the manipulation of real activities and the cost of equity in companies listed on the Tehran Stock Exchange. Stock Exchange Practical-Research Quarterly, No. 7, 54-35.

    Mlanazari, Mahnaz and Karimi Zand, Sanaz (2016). Investigating the relationship between profit smoothing and the type of industry in companies listed on the Tehran Stock Exchange, Accounting and Auditing Reviews, No. 47, 100-83.

    Namazi, Mohammad (2008). Investigating the activity-based costing system in management accounting and its behavioral considerations, Quarterly Journal of Accounting and Auditing, No. 26 and 27: 71-106.

    Namazi, Mohammad (2004). Examining the applications of agency theory in management accounting. Journal of Social and Human Sciences of Shiraz University; Series 43, No. 2, 147-164.

    Namazi, Mohammad and Devanipour, Iraj (2009). Experimental investigation of cost stickiness behavior in Tehran Stock Exchange. accounting and audit reviews; 62: 102-85.

    Namazi, Mohammad, Ghafari, Mohammad Javad and Faridouni, Marzieh (2011).

Investigating the effect of profit management incentives on cost stickiness (companies admitted to Tehran Stock Exchange)