The Impact of Fairness-Based and Justice-Based Management Behavior on the Relationship Between Accounting Concepts and Financial Reporting Readability

Document Type : Original Article

Authors

Department of Accounting, Central Tehran Branch, Islamic Azad University, Tehran, Iran

Abstract

The present study aimed to investigate the effect of fairness-based management behavior and justice-based management behavior on the relationship between accounting concepts and financial reporting readability in firms listed on the Tehran Stock Exchange. In this study, corporate accounting concepts were operationalized using six indicators (financial reporting quality, social responsibility disclosure, corporate governance, audit quality, accounting conservatism, and earnings management). Twelve hypotheses were developed and tested in this study using the data from 140 firms listed on the Tehran Stock Exchange from 2007 to 2018. The research regression model was tested using a fixed-effects panel data approach. The results showed that justice-based management behavior affects the role of financial reporting quality, corporate governance, audit quality, and earnings management in financial reporting readability. However, it does not affect the role of corporate social responsibility (CSR) and accounting conservatism in financial reporting readability. Furthermore, it was shown that justice-based management behavior affects the role of financial reporting quality, CSR, corporate governance, audit quality, and earnings management in financial reporting readability, but it does not have any impact on the role of accounting conservatism in financial reporting readability. The results of this study confirmed that justice-based management behavior increases transparency and supervision. It also enhances transparency and the positive impact of accounting concepts on financial reporting readability and makes the reporting environment more transparent for users of accounting and financial information.

Keywords

References

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