The Effect of Authorized Professional Judgment’s Application in Iran Accounting Standards on Qualitative Characteristics of Accounting Information

Subject Areas :

Hashem Nikomaram ¹ , Mousa Bozorg Asl ² , Mehdi Taghavi ³ , Ali Asghar Mahmoudzadeh ⁴

1 - استاد و عضو هئیت علمی دانشگاه آزاد اسلامی واحد علوم و تحقیقات
2 - استادیار و عضو هئیت خلمی دانشگاه علامه طباطبایی
3 - استاد و عضو هئیت علمی دانشگاه آزاد اسلامی واحد علوم و تحقیقات
4 - دکتری حسابداری از دانشگاه آزاد اسلامی واحد علوم و تحقیقات

Received: 2015-05-08 Accepted : 2015-05-08 Published : 2013-08-23

Keywords: Reliability, Professional Judgment in accounting, Comparability,

Abstract :

Financial statements have been considered as the most significant part for contributing the financial reporting process, assessing financial position, performance and flexibility of companies. In general, the field of activities of companies is very various and these are always faced with so many economical events, so it is not possible to define some specific regulations for reporting those events. In this case, there is an emphasis for financial statements preparers to apply professional judgment in accounting standards. In this study, we are going to elaborate whether the application of professional judgment in Iran accounting standards will affect the quality of financial information such as comparability and reliability of them? And if accountants intend to change the financial information for his benefit, does the professional judgment let them to do that and work as an appropriate tool for their goals? For considering the subject of this research, we have used a combined design in order to measure the effects of financial statements preparers’ decisions on comparability and reliability of the information by using professional judgment. The empirical evidences have been collected to demonstrate whether the level of applied professional judgment in Iran accounting standards, can have any influence on comparability of financial statements. Findings of this research show that using professional judgment in accounting standards will decrease comparability of financial reporting. Empirical findings of this research show that the accountants which are put in an suitable circumstance for moral hazard in comparison to other people who are not in such situation, use their professional judgment to demonstrate better performance for their company and gain more benefits.

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