The performance of corporate social responsibility based on strengths and weaknesses and the Profit and loss Items Classification Shifting: Opportunistic view versus ethical view

Subject Areas :

kaveh parandin ¹ , Yaser shirzadi ² , Somayeh Hosseini Aghdaei ³

1 - Department of Accounting, Payam Noor University, Iran
2 - Instructor, Department of Accounting, Payame Noor University, Tehran, Iran
3 - Assistant Professor, Department of Accounting, Payame Noor University

Received: 2023-05-23 Accepted : 2024-10-28

Keywords: opportunistic perspective, corporate social responsibility, Classification Shifting, earnings management, ethical perspective,

Abstract :

The purpose of this research is to investigate the relationship between corporate social responsibility and the company's behavior for misclassifying profit and loss items (operating expenses as non-operating expenses and non-operating income as operating income) in the profit and loss statement to increase operating profit. In order to carry out this research, the information related to 191 companies admitted to the Tehran Stock Exchange for the years between 2016 and 2021 have been tested by using multivariable regression equations using ordinary and generalized least squares methods using Eviews version 12 software. Research findings show that companies with good performance (strengths) of social responsibility are less involved in changing the classification of incomes; While companies with poor performance (weak points) of social responsibility, more in changing the classification of costs; But they are less involved in changing the classification of incomes. The results of this research are consistent with the view that companies with social responsibility in financial reporting have ethical behavior. This means that the increase in social responsibility through the reduction of information asymmetry will increase the transparency of financial information and as a result reduce the change in the classification of profit and loss items. The findings of this research enrich the research literature of the opportunistic view versus the ethical view of corporate social responsibility and change the classification of profit and loss items.