The Relationship between the Elements of Intellectual Capital and Earnings Management

Subject Areas :

Mohammad Hossein Setayesh ¹ (دانشیار حسابداری دانشگاه شیراز)
Mojtaba Saeedi ² (دانشجوی کارشناسی ارشد حسابداری دانشگاه شیراز)
Mohammad Hossein Ghadirian Arani ³ (دانشجوی کارشناسی ارشد حسابداری دانشگاه شیراز)

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

Keywords: Earnings Management, Intellectual Capital,

Abstract :

The purpose of this paper is investigating the relationship between the elements of intellectual capital and earnings management for companies listed in Tehran Stock Exchange. Samples of 77 companies during 1385 to 1389 in the total level and for level of industries were examined. To determine discretionary accruals as earnings management indicator(dependent variable), the Modified Jones Model(1995) has been applied. In addition, the criteria of intellectual capital in the total level and for level of components include human capital, structural capital and physical capital as independent variables have been measured by Pulic model. Also, control variables involve industry type, percentage of managerial ownership, firm size, board size, percentage of non-bounded board members, presence of woman members in the board director. Multiple regression has been applied to test the research hypothesis at α= 5%. The findings suggest any significant relationships between the elements of intellectual capital and earnings management. It means that companies listed in Tehran Stock Exchange by intellectual capital disclosing don't manage earnings and don’t use competency advantage to manage earnings. Since earnings management may be opportunistic or be aligned with stockholders interest to increase the firms value, so it's suggested to managers that they can help to increase firms value by intellectual capital disclosing.

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