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:: Volume 5, Issue 10 (2-2021) ::
aapc 2021, 5(10): 230-201 Back to browse issues page
Investigating the Moderating role of Organizational Identity on the Relationship between Managerial Compensation and Earnings Manipulation
Ahmad Abdollahi1 , Fatemeh Riahi2 , Yasser Rezaei Pitenoei 3
1- Assistant Professor of Accounting, Golestan Institute of Higher Education, Gorgan, Iran(ahmabdollahi@gmail.com)
2- MA in Accounting, Golestan Institute of Higher Education, Gorgan, Iran.(fateme.riahi@yahoo.com)
3- Assistant Professor of Accounting, University of Guilan, Rasht, Iran.(Corresponding Author) , rezaei.yasser@gmail.com
Abstract:   (14622 Views)
The adoption of compensation contracts to motivate executives to exert effective and conducive efforts has raised worries about the likelihood of earnings manipulation by management. On the other hand, recent studies show that organizational identity (OI) can have a great impact on motivating managers to exhibit their optimal performance and reduce agency costs as managers’ performance towards the benefits of their firms could enhance their desirability. Therefore, the main purpose of this study is to investigate the relationship between managerial compensation and earnings manipulation with focus on the moderating effect of organizational identity on this relationship. The statistical population of the research includes financial managers of 76 companies in five industries including automobile and automobile parts manufacturing, machinery, electrical machinery and equipment, basic metals and metal products manufacturing listed on the Tehran Stock Exchange in 2018. In pursuit of this goal, standard questionnaires were used to collect the research data following the study of Abernethy et al (2017) and a questionnaire was sent to each company. Finally, 68 companies answered the questionnaires and were included in statistical analysis. The research hypotheses are tested using structural equation method and PLS software. Having ensured the good-fitness of the structural and measurement models, the results reveal that managerial compensation have a positive effect on earnings manipulation and organizational identity has a negative effect on earnings manipulation. Also, organizational identity moderates the positive effect between compensation and earnings manipulation and undermines the severity of the effect. Research findings can help investors, capital market regulators and other accounting information users understand the impact of organizational identity on capital market prosperity and guide their decision making.
 
Keywords: Compensation Contract, Earnings Manipulation, Organizational Identity.
Full-Text [PDF 325 kb]   (1282 Downloads)    
Type of Study: Research | Subject: Special
Received: 2019/11/13 | Accepted: 2020/02/1 | Published: 2021/02/19
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Abdollahi A, Riahi F, Rezaei Pitenoei Y. Investigating the Moderating role of Organizational Identity on the Relationship between Managerial Compensation and Earnings Manipulation. aapc 2021; 5 (10) :230-201
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Volume 5, Issue 10 (2-2021) Back to browse issues page
دوفصلنامه علمی حسابداری ارزشی و رفتاری journal of Value & Behavioral Accounting
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