Information Asymmetry with Emphasis on the Role of Financial and Managerial Criteria Based on Fuzzy Logic and Artificial Neural Networks

Subject Areas : Financial Accounting

Mohammad Amir Golshani ¹ , Mehrdad Ghanbari ² , Babak Jamshidi Navid ³ , Forouzan Mohammadi Yarijani ⁴

1 - PhD student, Department of Accounting, Kermanshah Branch, Islamic Azad University, Kermanshah, Iran
2 - استادیار گروه حسابداری، دانشکده علوم انسانی، واحد کرمانشاه، دانشگاه آزاد اسلامی، کرمانشاه، ایران
3 - Department of Accounting, Kermanshah Branch, Islamic Azad University ,Kermanshah ,Iran
4 - گروه حسابداری، واحد سنندج، دانشگاه آزاد اسلامی، سنندج، ایران

Received: 2022-04-30 Accepted : 2023-02-23 Published : 2024-04-27

Keywords: Information Asymmetry, Corporate Profit Forecasting, Corporate Governance, Capital Market, Capital Return,

Abstract :

This paper addresses the absence of a suitable criterion for measuring information asymmetry between managers forecasting earnings and analysts forecasting earnings through statistical methods. Besides, this paper aims to provide a model of information asymmetry, emphasizing the role of financial and managerial criteria. This is applied qualitative and quantitative research (mixed method). The library method is used to prepare and formulate theoretical bases. In addition, the field method is used for collecting data to measure and identify indices and modeling. Factor analysis was used to analyze the data, following identifying the dimensions and variables of financial and managerial criteria of information symmetry to eliminate extraneous factors and classify. The following five main dimensions were determined, including corporate profit forecast, corporate governance, capital market, capital return, and management characteristics of the company. Then, the modeling was done using fuzzy mathematics through triangular numbers, Mamdani implication, and center of gravity methods. The final results of the study of the company listed on the Tehran Stock Exchange show that the level of information symmetry in the range of zero to 100 equals 55.1, to predict the company's profit is 48.54; corporate governance is 56.95; the capital market is 1/59; capital return is 61.07, and managerial characteristics of the company are 67.84. Finally, we examined the factors affecting the information asymmetry obtained from fuzzy neural networks. The findings show a higher prediction accuracy of fuzzy neural network methods than other related prediction methods.

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