Behavioral model of profit management based on environmental factors and implicit knowledge of managers

Subject Areas :

Abas Alizadeh ¹ , ْAsgar Pakmaram ^{2 *} , Saeid Jabbarzadeh Kangarluei ³ , Jamal Bahrisales ⁴

1 - PhD Student, Accounting Department, Faculty of Humanities, Urmia Branch, Islamic Azad University, Urmia, Iran
2 - Associate Professor, Accounting Department, Bonab Branch, Islamic Azad University, Bonab, Iran
3 - Associate Professor, Accounting Department, Faculty of Humanities, Urmia Branch, Islamic Azad University, Urmia, Iran
4 - Associate Professor, Accounting Department, Faculty of Humanities, Urmia Branch, Islamic Azad University, Urmia, Iran

Received: 2024-10-02 Accepted : 2024-12-23 Published : 2024-12-20

Keywords: Earnings management behavior, environmental structures, tacit knowledge and experience of managers, ethical characteristics, supervision and auditing.,

Abstract :

Purpose: The purpose of this study is to present a behavioral model of earnings management based on environmental factors and managers' tacit knowledge using a qualitative approach and grounded theory.

Methodology: The data collection tool was semi-structured interviews with experts, and for this purpose, in 2021, in-depth interviews were conducted with 12 experts who were experts and experienced in the field of earnings management behavior using purposeful snowball sampling until saturation. Then, the research data was analyzed using the coding method and using MAXQDA.

Findings: The results showed that the most important factors affecting earnings management behavior include institutional environment, environmental uncertainty, market reaction, strategic opportunities, environmental complexity, tacit knowledge, and managers' experience.

Originality: The categories of unethical behavior, behavioral and ethical standards, lack of adherence to ethical principles, moral culture and values, moral stagnation, moral standards, beliefs, ethics and religious precepts, personality traits, moral perception and moral leadership constituted the background conditions. The intervening conditions have the main categories of monitoring personal judgments, stable and monitored information, monitoring reflected earnings, adjusting conflicts of interest, crediting information, audit quality, supervisory mechanisms, internal controls, limiting opportunistic behaviors and controlling managers' incentives. The only main strategic category, earnings management behavior methods and ultimately its consequences including reduced social trust, reduced economic health of the country, reduced industry health, and market inefficiency, were identified.

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