شناسایی عوامل مؤثر بر تمایل به تقلب در مدرسان حسابداری با تأکید بر نظریه مثلث تقلب

Journal of Accounting Advances, (2020) 12(1):
DOI: 10.22099/JAA.2021.35202.1935
 
 
 
 
 
Journal of Accounting Advances (JAA)
Journal homepage: www.jaa.shirazu.ac.ir/?lang=en
 
 
 
 
 
 
Identifying Factors Influencing Tendency to Cheat in Accounting by Emphasizing Fraud Triangle Theory
Rezvan Hejazi¹, Hossein Rajabdorri^2*, Mojtaba Bordbar³
 
 
Professor of Accounting at Khatam University, Tehran, Iran, Hejazi33@gmail.com
Ph.D. Student of Accounting and Member of Young Researchers and Elite Club, Bandar Abbas Branch, Islamic Azad University, Bandar Abbas, Iran, Hosrado@gmail.com
M.A. Student of Accounting, Fasa Branch, Islamic Azad University, Fasa, Iran, Mojtaba.bordbar91@gmail.com
 
 
 
 
 
 
ARTICLE INF
 
 
ABSTRACT
 
 
 
 
 
Received: 2020-10-02
Accepted: 2021-01-24
 
 
 
The purpose of this study is to identify factors influencing the tendency to cheat in accounting by emphasizing the fraud triangle theory. Scientific and literary fraud has detrimental effects that tarnish the professional status of the scientific community. This research is in terms of practical purposes that society consists of accounting instructors of different universities in the country. For this purpose, by obtaining the opinion of 170 accounting instructors in the country in a simple random method in 2020, this issue was investigated.The effect of the dimensions of the fraud triangle including pressure (financial pressure and work pressure), opportunity (control and monitoring and technology development), and justification (unfair competition) on the tendency of fraud in accounting instructors was investigated by the partial least squares technique and structural equations in PLS software. Findings showed that there is a significant relationship between the studied factors and the tendency to cheat in accounting instructors, the severity of which is 61. Also, the study of research hypotheses showed that there is a positive and significant relationship between financial pressure (54%) and work pressure (43%) and the tendency to cheat. Also, a positive and significant relationship was observed between unfair competition and the tendency to cheat at the level of 19%. Other research findings also showed that there is no significant relationship between control and supervision and technology development with the tendency to cheat in accounting instructors. The general finding of this study indicates that more attention is paid to the tendency of fraud and plagiarism in the field of accounting and it is necessary to pay more attention to it.
 
 
 
 
 
*Corresponding author:
 
Hossein Rajabdorri
 
Ph.D. Student of Accounting and Member of Young Researchers and Elite Club, Bandar Abbas Branch, Islamic Azad University, Bandar Abbas, Iran
 
Email: Hosrado@gmail.com
 
 
 
 
 
 
1- Introduction
There have been numerous reports of the tendency to cheat in Iranian universities, both formal and informal, in domestic and foreign news, highlighting the importance of paying close attention to the tendency to cheat. Although there have been numerous studies on the tendency to cheat internationally and nationally, no independent research has yet been conducted on the factors affecting accounting piracy with emphasis on the fraud triangle in Iran. It is of utmost importance in the accounting profession, and its conditions cannot be equated with other disciplines, and thus requires independent research that clarifies the need for research.
 
2- Research Questions or Hypothesis
First hypothesis: There is a positive and significant relationship between financial pressure and the tendency to cheat.
Second hypothesis: There is a positive and significant relationship between work pressure and the tendency to cheat.
Third hypothesis: There is a negative and significant relationship between control and surveillance and the tendency to cheat.
Fourth hypothesis: There is a significant positive relationship between technology development and the tendency to cheat.
Fifth hypothesis: There is a negative significant relationship between unfair competition and the tendency to cheat.
 
3- Methods
The present study is a descriptive-survey in terms of data collection. The primary data collection methods in this study are a combination of library and field research methods. Using a library method through study, subject literature, and research background, a suitable framework was provided for the subject. In the field method, questionnaires were used to collect information needed to investigate the topic.
  In order to test the research hypotheses, the structural equation technique was used in Smart PLS software.
 
4- Results
The results showed that R2 of the study was 0.612. R² is a criterion used to connect the measurement section and the structural section to the structural equation model and indicates the effect that an exogenous variable has on an endogenous variable. The essential point here is that R² is calculated only for endogenous (dependent) structures of the pattern, and for exogenous structures, the value of this criterion is zero. The higher the R² value of the endogenous structures of a model, the better the research pattern fits. The overall result of this section will be that 56% of the factors investigated will be effective in accounting professors' tendency to cheat. There is a significant relationship between financial pressure, job pressure, and unfair competition with the tendency to cheat in accounting instructors, but there is no significant relationship between technology development and control and supervision with accounting fraud.
 
5- Discussion and Conclusion
Pressure has been identified as a trigger for the tendency to cheat. In this study, the pressure includes financial pressure and work pressure. The first hypothesis of the study showed that there is a positive and significant relationship between financial pressure and the tendency to cheat at the level of 54%. Since the publication of the article promotes the academic standing of teachers, and when academic lecturers are promoted to higher academic positions, their salaries increase according to the academic fee scheme; financial pressure can cause academic fraud.
The second hypothesis of the study also showed that there is a positive and significant relationship between work pressure and the tendency to cheat at the 43% level. In relation to job stress, factors such as the desire to show off, job dissatisfaction, worry, and anxiety about losing a job can lead to cheating in accounting instructors. Lack of time is another factor that can be put in the work pressure group and cause teachers to cheat. Consequently, with regard to the factors stated, teachers tend to publish more articles in spite of the situations that lead them to cheat.
Opportunities in this research include technology control, monitoring, and development. The third hypothesis showed that there was no significant relationship between control and supervision and the tendency to cheat. One of the causes of fraud is the lack of internal control that will reduce the tendency to cheat despite control. The findings did not show a significant relationship between the variables considered in this hypothesis that could be due to the inefficiency and ineffectiveness of controls.
The fourth hypothesis also showed no significant relationship between technology development and the tendency to cheat. This was expected because the development of technology in the country in the area of research and software related to the prevention of the tendency to cheat is not appropriate.
In the fifth hypothesis of the research, the effect of unfair competition on the basis of fraud triangle justification on accounting theft was investigated. This part of the findings also showed that there is a positive and significant relationship between the two mentioned variables at the level of 19%. Because misconduct in which accounting officers misrepresent activities or practices or violate existing laws is an inappropriate practice that results in an increased tendency to cheat.
 
Keywords: Tendency to cheat, Plagiarism, Fraud triangle, Lecturers, Accounting.
 
 
 
 
Journal of Accounting Advances, (2020) 12(1): 1-27
DOI: 10.22099/JAA.2021.40327.2124
 
 
 
 
 
Journal of Accounting Advances (JAA)
Journal homepage: www.jaa.shirazu.ac.ir/?lang=en
 
 
 
 
 
 
 
The effect of Earnings Co-movement on Quarterly Earnings Response Coefficient
Narges Hamidian¹
 
1. Assistant Professor, Department of Accounting, Faculty of Administrative Sciences and Economics, University of Isfahan
 
 
 
 
 
ARTICLE INF
 
 
ABSTRACT
 
 
 
 
 
Received: 2021-04-12
Accepted: 2021-06-22
 
 
 
Prior literature shows that a firm’s earnings tend to move with other firms in the same industry. This concept is called co-movement. So investors will be able to form an expectation of a firm’s earnings from the industry. Given that the reported earnings do reflect the flow of information to the market, the purpose of this study is investigating the effect of earnings co-movement on quarterly earnings response coefficient. The sample of this study consists of 134 listed companies in Tehran Stock Exchange during the period 2008 to 2019. The results of the first hypothesis showed that the response coefficients to quarterly earnings announcement have a positive and significant relationship with the buy and hold returns in the three-day earnings announcement window, and earnings co-movement weakens this relationship. Also, the results of testing the second and third hypotheses showed that when there is good news, earnings co-movement weakens earnings response coefficient, but under bad news, earnings co-movement has no effect on earnings response coefficient.
 
 
 
 
 
* Corresponding author:
Narges Hamidian
Assistant Professor, Department of Accounting, Faculty of Administrative Sciences and Economics, University of Isfahan
 
Email: n.hamidian@ase.ui.ac.ir
 
 
 
 
 
1- Introduction
Prior literature shows that firms’ earnings tend to co-move together, so investors will be able to form an expectation of a firm’s earnings from the market (Brown and Ball, 1967). This concept is called co-movement. Given that there is a significant relationship between a firm’s earnings and the earnings of other firms in the market, and the reported earnings do reflect the flow of information to the market, the question is whether this relationship has an effect on earnings informativeness?
There are two different views about how earnings co-movement impacts earnings response coefficient (earnings informativeness). First, some studies imply the higher the degree of earnings co-movement of a firm with other firms in same industry, the less informative that firm’s earnings release will be. In other words, investors will be able to predict a firm’s earnings by using similar firms in the same industry and so there will be less uncertainty about that firm’s earnings (see, e.g. Fischer and Verrecchia, 2000; Jackson et al, 2020). Second, some other papers (such as Heinle and Verrecchia, 2016 and Jackson et al., 2017) show that the more the earnings of a firm co-move with the industry and market, the less likely it is that the firm will issue a biased earnings report. So, the earnings will be more informative to investors.
Therefore, this study attempts to investigate the effect of earnings co-movement on quarterly earnings response coefficient. Also, because of the behavioral biases of investors in reaction to good and bad news, the effect of earnings co-movement on quarterly earnings response coefficient with considering good and bad news has also been investigated.
 
2- Hypothesis
According to the literature, the research hypotheses include:
 
Earnings co-movement weakens response coefficient to quarterly earnings announcement.
Under good news, earnings co-movement weakens response coefficient to quarterly earnings announcement.
Under bad news, earnings co-movement strengthens the response coefficient to quarterly earnings announcement.
 
 
3- Methods
In this study, in order to calculate the variables and test the hypotheses, required data has been collected from the annual and quarterly financial statements and its footnotes of listed companies in the Tehran Stock Exchange and the existing databases including “Rahavard Novin” and “Codal”. The sample of this study consists of 134 listed companies in Tehran Stock Exchange during 2008 to 2019. To test this hypotheses, the period of 8 years (2012 to 2019) and panel data methods have been used.
 
 
4- Results
The results of investigating the first hypothesis showed that the response coefficients to quarterly earnings announcement have a positive and significant relationship with the buy and hold returns in the three-day earnings announcement window, and earnings co-movement weakens this relationship. Also, the results of testing the second and third hypotheses showed that when there is good news, earnings co-movement weakens earnings response coefficient, but under bad news, earnings co-movement has no effect on earnings response coefficient.
 
5- Discussion and Conclusion
In this paper we investigated the informativeness of a firm’s earnings in the presence of information about other firms’ earnings (i.e., earnings co-movement). Some literatures show the greater the degree of co-movement, the less relevant earnings become as investors do not need to rely on the information signal from the firm because they can predict earnings from alternative sources in the same industry. On the other hand, some studies imply the greater the degree of co-movements, the less opportunity managers have to bias the earnings signal which will lead to the earnings becoming more reliable and more informative.
The results of investigating the first hypothesis showed that the response coefficients to quarterly earnings announcement have a positive and significant relationship with the buy and hold returns and when earnings co-movement is considered, the quarterly earnings response coefficient decreases. This means that when earnings’ firms move with other firms in the same industry, investors can get information from other firms in the industry and better predict the earnings’ firm. So, earnings announcement will contain less unexpected information. As a result, earnings response coefficient decreases. This result is consistent with Jackson et al., (2020).
The results of testing the second hypothesis indicates that when there is good news, earnings co-movement weakens earnings response coefficient. This implies that investors pay more attention to the good news of the industry and react less to the earnings when good news is published by the firm. But the results of testing the third hypothesis showed under bad news, earnings co-movement has no effect on earnings response coefficient. This lack of relationship may be due to the fact that investors do not pay much attention to the bad news of the industry.
For future studies, we suggest to analyze the relationship between co-movement and other variables such as comparability of financial statements, earnings quality, earnings management, fraud, etc. The results of this research can also be done separately by industry to determine in which industries there is more co-movement.