Pages: 76-89

Abstract

One of the most important discussions in corporate ownership structure pertains to ascertainment of the exertion of correct governance by the shareholders on the company administration. Therefore, the present study aims at investigation of the corporate structure’s effect on earnings manipulation via presenting actual earnings management documents from Tehran’s securities exchange market. In the literature on corporate governance, there are two attitudes towards the institutional investors. Thus, information and entries of the financial statements were gathered for a time span between 2012 and 2016 to do so. The study is an applied research in terms of its objectives and it is of descriptive-correlation type based on its nature and method. The extracted data have been organized in Excel 2013 and Eviews 8 and Stata 12 Software have been employed to analyze the data. The results obtained from the hypotheses test indicated that there is a significant relationship between managerial ownership and abnormal operating cash flows in Tehran’s securities exchange market. Also, a significant relationship was found between managerial ownership and abnormal discretionary expenses of the companies accepted to Tehran’s securities exchange market. There was additionally found significant relationships between institutional ownership and operating cash flows as well as between institutional ownership and abnormal discretionary expenses in the firms accepted to Tehran’s securities exchange market. Furthermore, the relationship between foreign ownership and operating cash flows was also found statistically significant and it was made clear that there is a significant relationship between foreign ownership and abnormal discretionary expenses of the companies accepted to Tehran’s securities exchange market. The managers and boards of directors of the companies can take advantage of the present study’s results to improve the organizational work processes in the area of cash flows besides utilizing the structural model to create an appropriate ownership system.