The Analysis of Matching Quality and Misstatement Financial Reporting over the Firm Life Cycle

Document Type : Research Paper

Authors

1 Ph.D.Candidate. Department of accounting, Faculty of Administrative Sciences and Economics, University of Isfahan, Isfahan, Iran

2 Associate prof. Department of accounting, Faculty of Administrative Sciences and Economics, University of Isfahan, Isfahan, Iran

3 Assistant Professor of Accounting, Faculty of Administrative Sciences and Economics, University of Isfahan, Iran

Abstract

The purpose of this research is to investigate the effect of different stages of the firm life cycle on the quality of financial reporting. To measure the quality of financial reporting, the quality of matching (simultaneous correlation between income and expenses) and the probability of misstatement financial reporting have been used. The statistical the population of this study are all companies listed in Tehran Stock Exchange, in which 101 companies in the period 2012 to 2023 have been selected by systematic elimination method. For data analysis and hypothesis testing, multivariate regression model based on panel data and probit regression is used. The results of the hypotheses test showed that the quality of the match in the maturity stage is higher than the introduction and growth stage, but the decline stage does not affect the quality of the match. In addition, the results showed that in the introduction stage, the probability of misstatement financial reporting is higher than in the maturity stage. Finally, the findings showed that in the growth and decline stage, the probability of incorrect financial reporting is not higher than in the maturity stage. Overall, the findings of this study increase researchers' understanding of the role of life cycle stages in creating variation in financial reporting quality.

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References

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Journal of Accounting Advances
Volume 15, Issue 2
November 2023
Pages 263-286

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History

  • Receive Date: 30 August 2023
  • Revise Date: 13 March 2024
  • Accept Date: 13 March 2024

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