The Relationship Between Information Technology Capacity and Reporting Quality in Companies Listed on the Tehran Stock Exchange
Subject Areas : Journal of Capital Market AnalysisMelika Rezaei hanjani 1 , Mozaffar jamalianpour 2
1 - Department of Accounting, Faculty of Management and Accounting, Allameh Tabatabaei University, Tehran, Iran.
2 - Department of Accounting, Faculty of Management and Accounting, Allameh Tabatabaei University, Tehran, Iran.
Keywords: Financial Reporting Quality, Earnings Quality, Software Capital Expenditures,
Abstract :
Abstract This research examines the relationship between software capital expenditures and the quality of financial reporting in companies. The statistical population of this research was all the companies admitted to the over-the-counter and Tehran Stock Exchange, after applying the research limitations, 156 companies were selected as a statistical sample. In order to prepare some variables, data from the period of 2012-2022 were used and the time period of hypothesis testing was defined as 2016-2021. The theoretical foundations of the research are gathered through library research and document analysis to explain the literature on the research topic. Code-based information from the Codal website is utilized to collect data related to research variables. The dependent variable in this study is the quality of financial reporting, measured by different criteria. The independent variable is software capital expenditures. Regression analysis using Eviews12 software is employed to analyze the research variables. The results indicate a significant and positive correlation between software capital expenditures and the quality of liability items, highlighting the importance of utilizing software technology in improving the accuracy and reliability of accounting information. Additionally, these expenditures are positively associated with profit stability and predictability, indicating their essential role in enhancing financial performance and predictability in various conditions. Furthermore, the positive correlation with earnings smoothness underscores the effective role of software technology in improving the financial reporting process. These findings emphasize the importance of optimizing and efficiently utilizing software technology in managing capital expenditures to enhance efficiency and transparency in business environments.
1.
Al-Sartawi, A. M, (2017). The Effect of the Electronic Financial Reporting on the Market Value Added of the Islamic Banks in Gulf Cooperation Council Countries. In 8th Global Islamic Marketing Conference.4-6. 2.
Asyik, N.F., Agustia, D. and Muchlis, M. (2023). Valuation of financial reporting quality: is it an issue in the firm’s Valuation?. Asian Journal of Accounting Research. 8(4). 387-399. 3.
Asyik, N.F., Muchlis, M., Riharjo, I.B. and Rusdiyanto, R. (2022). The impact of a male CEO’S facial masculinity on leverage. Cogent Business and Management. 9(1). 2119540. 4. Bandarian, A. Ahmadi, M. Bozorgmehryan, S. Maqsoudi, F. (2019). The impact of online financial reporting quality and firm characteristics on the informational content of market value of shareholders'
equity. Journal of Accounting Knowledge. 11(43). 219-246 (in Persian). 5.
Chege, S. M., Wang, D., & Suntu, S. L. (2020). Impact of information technology innovation on firm performance in Kenya. Information Technology for Development. 26(2). 316-345. 6.
Dang, H.N., Nguyen, T.T.C. and Tran, D.M. (2020). The impact of earnings quality on firm value: the case of Vietnam. Journal of Asian Finance, Economics and Business. 7(3). 63-72. 7.
Dechow, P., Dichev, I., (2002). The quality of accruals and earnings: the role of accrual estimation errors. The Accounting Review. 77. 35–59. 8.
Faccia, H. F., Coman, B. J., & Damerji, F. S. (2023). Information technology and financial reporting practices in smes in california, USA. African Journal of Emerging Issues. 5(2). 13-20. 9. Foroughi, D. Rahrovi Dastjerdi, A. Sepahi, F. (2022). The effect of firm value and accounting profit on capital expenditures: the moderating role of internal information quality. Quarterly Journal of Accounting
Knowledge. 13(2) (in Persian). 10.
Herath, S.K. and Albarqi, N. (2017). Financial reporting quality: a literature review. International Journal of Business Management and Commerce. 2(2). 1-14. 11.
Hussein, K. M. (2021). Review in Digital Data in Supporting of Information Technologies. Journal of Digital Integrated Circuits in Electrical Devices, 6(1), 23-29. 12.
Ivančić, L., Vukšić, V. B., & Spremić, M. (2019). Mastering the digital transformation process: Business practices and lessons learned. Technology Innovation Management Review. 9(2). 13.
IASB, I. (2018). Conceptual Framework for Financial Reporting, 3rd ed., IFRS Foundation, Ed, London. 14. Kaawaase, T.K., Nairuba, C., Akankunda, B. and Bananuka, J. (2021). Corporate governance, internal audit quality and financial reporting quality of financial institutions. Asian Journal of Accounting Research.
6 (3). 348-366 15. Khosravi, E. Abdi, S A. Jafari Tabar, H. (2016). The role of Information Technology (IT) on the quality of financial reporting. Conference on Management, Accounting, Economics, and Insurance Sciences. Zanjan
(in Persian). 16.
Lipe, R. (1990). The relation between stock returns and accounting earning given alternative information. Accounting Review. 49-71. 17.
Leuz, C., Nanda, D & Wysocki, P.D, (2003). Earnings management and investor protection: an international comparison. Journal of Financial Economics. 69(3). 505-527. 18.
Lestari, S. P., & Khafid, M. (2021). The role of company size in moderating the effect of profitability, profit growth, leverage, and liquidity on earnings quality. Accounting Analysis Journal. 10(2). 86-93. 19.
Liu, S. D., & Skerratt, L. (2014). Earnings quality across listed, medium-sized, and small companies in the UK. Brunel Univ. West London, Brunel Business School. 20.
Lin, C.-J., Wang, T. and Pan, C.-J. (2016). Financial reporting quality and investment decisions for family firms. Asia Pacific Journal of Management. 33. 499-532. 21.
Mbawuni, J. (2019). Assessing financial reporting quality of listed companies in developing countries: evidence from Ghana. International Journal of Economics and Finance. 11(9). 1-29. 22.
Masli, A., Peters, G. F., Richardson, V. J., & Sanchez, J. M. (2010). Examining the potential benefits of internal control monitoring technology. The Accounting Review. 85(3). 1001-1034. 23.
Nguyen H A, Nguyen T H. (2020). Determinants of firm’s capital expenditure: Empirical evidence from Vietnam. Management Science Letters. 10. 943–952. 24. Noury, B., Hammami, H., Ousama, A.A. and Zeitun, R. (2020). The prediction of future cash flows based on operating cash flows, earnings and accruals in the French context. Journal of Behavioral and
Experimental Finance. 28. 100414. 25.
Schmitz, J., & Leoni, G. (2019). Accounting and auditing at the time of blockchain technology: a research agenda. Australian Accounting Review. 29(2). 331-342. 26. Vatanparast, M. Maleki, M. (2020). Investigating the relationship between research and development expenditures and capital budgeting methods in industries with advanced technology. Financial
Management Strategy Quarterly. 8(3). (in Persian). 27. Yasa, G. S. W., Wirakusuma, M. G., & Suaryana, I. G. N. A. (2020). Effect of leverage, free cash flow, corporate governance, growth and risk management on earnings quality. International Research Journal of
Management, IT and Social Sciences. 7(1). 177-184
