Corporate social responsibility and Classification Shifting of income and expenses from the ethical perspective of earnings management
Corporate social responsibility and Classification Shifting of income and expenses from the ethical perspective of earnings management
Subject Areas : Management Accounting
yasser shirzadi 1 * , Kaveh parandin 2 , Somayeh Hosseini Aghdaei 3
1 - Instructor of Accounting, Payame Noor University
2 - Assistant Professor of Accounting, Payame Noor University, Tehran, Iran
3 - Assistant Professor of Accounting, Payame Noor University, Tehran, Iran
Keywords: earnings management, corporate social responsibility, classification shifting, ethical perspective,
Abstract :
Today companies disclose social responsibility activity reports in order to gain the satisfaction of stakeholders and reduce their pressure to provide non-financial information. Despite this, social responsibility activities can be used as a solution to achieve the personal goals of managers and thus earnings management. Therefore, the purpose of this research is to investigate the relationship between corporate social responsibility and company behavior for the misclassification income and expenses from ethical perspective. In order to test the hypotheses, a sample consisting of 177 companies accepted to the Tehran Stock Exchange during the years 2015 to 2022 was selected. Research hypotheses have been tested using multivariate regression statistical methods using ordinary and generalized least squares methods. Research findings show that companies with high social responsibility are less involved in the classification shifting income and expenses than companies with low social responsibility. This finding supports an ethical perspective to earnings management. In general, the research results indicate that companies with social responsibility in financial reporting have ethical behavior. This means that the increase in social responsibility through the reduction of information asymmetry will increase the transparency of financial information and as a result reduce the change in the classification of profit and loss items. On the other hand, the results of this research contribute to the enrichment of knowledge in the field of social responsibility and earnings management research by developing literature.