political connections

Taxation is a strategic, fundamental and dynamic topic that plays a fundamental and pivotal role in the realization of the national development plans of any country. hence The purpose of the present study was to investigate the impact of business strategy on tax avoidance with emphasis on the effect of political connections of listed firms in Tehran stock exchange. Accordingly, this study sought to achieve this goal by analyzing the data of 107 sample firms during the period of 10 years from 2014 to 2023. In order to analyze the data, multiple regression and panel data and EViews and STATA softwares were used. The analysis of the results showed that prospectors strategy has a significantly positive effect on tax avoidance. On the other hand, defenders strategy has a significantly negative effect on tax avoidance. Also, political connections have a significantly negative effect on the relationship between prospectors strategy and tax avoidance. Finally, political connections have a significantly positive effect on the relationship between defenders strategy and tax avoidance

This research investigates the influence of political connections on the selection of auditors and auditor opinions in companies listed on the Tehran Stock Exchange. The study, with a practical goal, employs a causal (post-event) research methodology. The statistical population of the research comprises all companies listed on the Tehran Stock Exchange, and a systematic elimination sampling method was used to select 121 companies as the research sample. The research was conducted over the period from 2017 to 2021. Data collection was carried out using library resources. Multiple regression analysis with panel data patterns was applied to test the first hypothesis, while logistic regression was used for the second hypothesis. The research findings indicate a significant and negative impact of political connections on auditor opinions. Additionally, the influence of political connections on the selection of independent auditors is also found to be significant and negative.Keywords: Political Connections, Auditor Selection, Auditor Opinion, Tehran Stock Exchange

Firms with political connections enjoy several economic benefits, so they are less likely to choose high-quality auditors to hide earnings management and opportunistic behaviors. And on the other hand, managers, with the aim of gaining advantages for the company under their management, usually establish and maintain a relationship with the government, but in markets with weak regulatory frameworks, this relationship can lead to the representation problem and related costs.The purpose of this research is to investigate the effect of political connections on the quality of audit institutions, taking into account the moderating role of agency fees in companies listed on the Tehran Stock Exchange. Using regression analysis, the relationship between the aforementioned variables was investigated in 178 companies admitted to the Tehran Stock Exchange for the period 1396-1400. The results of the research show that there is a positive and significant relationship between the company's political connections and the selection of quality auditing firms, and agency costs intensify the direct relationship between the company's political connections and the selection of quality auditing firms.

 Because of interest conflicts between managers-owners and the possibility occurrence of agency problems, it is important to identify the potentially driving factors of agency costs and assess the role of monitoring mechanisms in order to reduce the intensity of agency costs. This paper assessed the potentially impact of external auditing on agency conflicts in political connected firms. The ratio of operational expenses to operational sales revenues is used as an index of agency costs. Also, politically governance affiliation in either board structure or ownership structure is considered as a proxy of political connection. In addition, effective role of external auditors is analyzed using auditors’ quality control rating, rotation and industry specialization criterion. Research data include 1632 firm-year observations witch consist of 204 firms listed in Tehran Securities & Exchange. Research hypotheses investigated through multivariate regression models using panel data with fixed effect and generalized least squares method. Research evidences documented that political connected firms have high level of agency costs significantly. On other side, auditor’s quality control rating, rotation and industry specialization criterion significantly lead to reduce agency costs. In addition, findings showed that auditor’s quality control rating, auditor’s rotation and auditor’s industry specialization caused to weaken the positive relation between political connection and agency costs, so lead to decrease destructive consequences of interest divergence; In fact, reputable auditors to maintain professional reputation, new auditors to maintain audit independence, and industry-specific auditors to maintain audit efficiency and effectiveness are elements of mitigating agency conflicts, especially in firms with political connection. So, it is important to understand this issue from the aspect of political connection costs and its role in intensifying agency costs, as well as from the aspect of improving audit process and its role in weakening agency costs, especially in political connected firms.

The purpose of this study is to investigate the relationship between Earnings persistence, institutional investors monitoring, and types of political connections in companies listed on the Tehran Stock Exchange. The statistical population of this study is all companies listed on the Tehran Stock Exchange from 2015 to 2021 and the number of samples is 105 companies. The regression analysis method and Ivory statistical software were used to analyze the research data. The results showed that institutional oversight in companies with political connections has an effective role in increasing profit stability. The selection of large auditors by companies with political connections has no significant relationship with profit stability. However, the longer the term of the CEO of companies with political connections increases, the more stable the profit. The results generally indicate a significant relationship between profit stability, institutional oversight, and various types of political communication.

This paper assessed the impact of political connection and financial misstatement on agency costs especially in politically connected firms. Agency cost is measured using the ratio of operational expenses to operational sales revenues index. Also, politically governance affiliation in either board structure or ownership structure is considered as a proxy of political connection. In addition, managers' multi-period incentives to misstate earnings in financial reporting are based on accruals earnings management. Research population using screening method consists of 204 firms listed in Tehran Securities & Exchange over 10 years period during March 2013 to March 2023. Research hypotheses investigated through multivariate regression models using panel data with fixed effect and generalized least squares method by E.Views software. Empirical findings documented that political connected firms have high level of agency costs significantly. Also, more managerial incentives to misstate earnings in financial reporting lead to increase agency costs level significantly. In addition, high level of earnings misstatement in politically connected firms caused to upward the agency costs level; In fact, these events enhance the interest conflict resulting from agency problems. So, it is aligned to political agency hypothesis, according to which the managers in politically connected firms, provoke agency conflicts due to opportunistic motives and harmful consequences of political connection. Other findings showed that the level of financial reporting misstatement and agency costs in politically connected firms has a significant difference compared to firms without political connection. This indicates the harmful consequences of political connections in Iran.

Some managers have this motivation to abuse financial reporting for their own benefit in certain circumstances. For example, managers, within the framework of accepted accounting principles, inflate profits in periods of heightened investor sentiments in order to gain benefits for themselves and related parties, in this situation, it is possible to create a significant difference in quality. Financial statement information will be available during periods of high investor sentiment. On the other hand, the existence of political connections leads to the existence of a kind of support for companies with political connections, which is expected to be stronger in these types of companies. Therefore, the purpose of this research is to investigate the relationship between investors' feelings and fraudulent reporting, and also to investigate this relationship in companies with political connections. To achieve the goal of the research, a statistical sample including 135 companies admitted to the Tehran Stock Exchange was selected during the years 2013-2017. This research is based on the goals, applied research type and in the hypotheses in the field of correlational research. In order to classify data, Excel software was used and for hypothesis testing, logit model was used in EViews10 software. The findings of the research show that there is no significant relationship between investors' feelings and fraudulent reporting, but among companies with political relations, since these types of relations cause companies to warm their backs, there is a difference between investors' feelings. and fraudulent reporting, there is a positive and significant relationship. Which indicates the fact that decision makers in companies with political ties see investors' feelings as an opportunity to provide fraudulent reporting for opportunistic behavior and abuse for their own benefit and those related to them.

This research has been conducted with the aim of experimental test of the effect of political relations on the amount of investment of companies and its efficiency in the period of 2012 to 2019 of companies listed in the Tehran Stock Exchange. The method of data collection is archival and reference to databases and the method of data analysis is multivariate regression model using panel data model and fixed effects method. The results show that the relationship between political relations and the amount of investment as well as investment efficiency is positive and significant. These results indicate that companies with political connections have more investment than other companies and investment efficiency is higher in companies with political connections. According to the research findings, it can be seen that companies with political connections invest more and more efficiently than other companies due to their government benefits and privileges, as well as the ease of attracting financial resources.

Since the audit committee is associated with both internal and external auditors, increasing the quality of internal and external audits will increase the effectiveness of the audit committee, and as a result, the audit committee can have a significant impact on reducing company risks. The main purpose of this study is to investigate the moderating effect of political connections on the relationship between the audit committee effectiveness and organizational risk management in companies listed on the Tehran Stock Exchange. Multiple linear regression model has been used to test the research hypotheses. To measure the effectiveness of the audit committee, have been used three characteristics of the size of the audit committee, the independence of the audit committee and the financial expertise of the audit committee. The statistical population of this research, after applying some limitations in the research, includes 140 companies listed on the Tehran Stock Exchange during the period 2013 to 2019. Research evidence showed that there is a positive and significant relationship between the size of the audit committee and organizational risk management. Also, the results showed that there is a positive and significant relationship between the independence of the audit committee and organizational risk management. Findings showed that there is a positive and significant relationship between the financial expertise of the audit committee and organizational risk management. In addition, the results showed that political connections has a negative and significant effect on the relationship between the size of the audit committee and organizational risk management. Also, the findings of this study showed that political connections has a negative and significant effect on the relationship between the independence of the audit committee and organizational risk management. In addition, the results of this study show that political connections has a negative and significant effect on the relationship between the financial expertise of the audit committee and organizational risk management. These results indicate the effectiveness of the audit committee in improving the risk management of the organization, in which, political connections can reduce the effectiveness of the audit committee on organizational risk management.

Because in times of crisis and economic sanctions, managers see an increase in demand as permanent and a decrease as temporary; If this is reflected in the decision, the stickiness will come at a cost. Therefore, it is expected that at a time when the general state of the economy is growing or in the face of economic sanctions, senior corporate executives will also consider this situation in in-house decisions and the cost stickiness will be affected differently. To take. Therefore, this study examines the impact of political relations and economic sanctions on cost stickiness, emphasizing the role of institution ownership in the Tehran Stock Exchange during the period 2013 to 2021 using the information of 150 companies. The hypotheses were tested by multiple regression using generalized least squares (EGLS) method with table data arrangement.The results of the research hypotheses showed that asymmetric behavior (cost stickiness) is present in administrative, public and sales costs, and in companies that have political relations, the stickiness of costs decreases, but in the context of economic sanctions, the stickiness of costs They become more and more sticky. In other words, in crisis situations such as economic sanctions; Having managers with political connections can help export products and supply raw materials, tax breaks, easier access to credit and financing for the company, and keep the company's conditions stable in the short term, all of which can lead to a reduction. Sticky costs. Also, in the conditions of economic sanctions, due to the increase in the cost of products and fluctuations in exchange rates and raw materials, the amount of sales of companies decreases and their costs increase sharply. They adjust income, which leads to cost stickiness as conditions improve. Institution ownership as a corporate governance mechanism also reduces asymmetric behavior in public and administrative spending, and in companies that have political relationships or are subject to sanctions, the existence of institution owners reduces the adhesion of costs. In other words, institution ownership reduces the stickiness of costs by forcing managers to reduce public and administrative costs.

The necessity of success and sound performance of companies is the existence of a strong corporate governance structure to better monitor management and use conservatism to improve financial performance. Present study investigates the effect of corporate governance and political connections on accounting conservatism of companies of listed companies in Tehran Stock Exchange. The statistical sample of the study is collected by systematic deletion from the companies listed in Tehran Stock Exchange during the period of 2013 to 2020, the size of which is 140 firms. To test the research hypothesis pooled data regression method is used. The results of the research hypothesis test indicate that the board size does not have a significant positive effect on accounting conservatism. Board independence, audit quality and management ownership have a positive and significant effect on accounting conservatism of companies listed companies in Tehran Stock Exchange. Also the results show that government ownership and political connections have a negative and significant effect on accounting conservatism in firms listed in Tehran Stock Exchange

The aim of this Research was to investigate the effect of political Connections on Firm value and profitability in companies listed on the Tehran Stock Exchange during the years 2016-2020 over a period of 5 years. The research method is correlational. In this Research, the statistical population of this study consists of all companies listed on the Tehran Stock Exchange. The political Connections variable is considered as the political Connections variable of companies that hold more than 20 Percentage of government shares. The value of the company is calculated based on Kyoto and the profitability variable of the company is also calculated from dividing the net profit by the assets.The results of the first hypothesis showed that political Connections has a direct and significant effect on the value of the company. Also, regarding the results of the second hypothesis, political Connections had a direct and significant effect on profitability. Regarding the control variables, the variables of financial leverage and firm size in the first hypothesis had a direct and significant effect on firm value. In the second hypothesis, the variables of financial leverage, company size, cost of capital had a direct and significant effect on profitability. Other control variables such as CEO tenure, research and development costs were not associated with related variables.

According to the conflict of interest theory, related-party transactions typically occur when a company’s assets are withdrawn in the interest of related parties, and to hide this, managers engage in earnings management. Accordingly, the present study aims at investigating the link between related-party transactions and earnings management in the firms listed on the Tehran Stock Exchange. In addition, it seeks to answer whether political connections moderate this association. To this end, the present study adopts related-party transactions as the independent variable, political connections as the moderating variable, and discretionary accruals as the dependent variable. The statistical population of the research consists of 86 firms listed on the Tehran Stock Exchange during the years 2015-2019. The research hypotheses were tested using a multivariate regression model based on panel data. The findings reveal that related-party transactions are significantly correlated with earnings management. Also, the membership of political figures on the firms’ boards intensifies the relationship between related-party transactions and earnings management.

Because of the benefits of political connections and lower necessity of responding to market pressures to increase information quality by politically connected firms, it is expected that these firms will provide low-quality accounting information. With respect to the extended role of government in Iranian economy, this study aims to investigate the relationship between political connections and accounting information quality in the listed firms in the Tehran Exchange Stock (TSE). The statistical sample includes 101 listed firms in the TSE between the years 2010 to 2018. Financial restatement and intensity of financial restatement are used as the criterions of low quality of accounting information. To achieve the research objectives, two hypotheses have been proposed and to test the hypotheses logistic regression and multiple linear regression analysis in a panel data mode were conducted. The results show a positive relationship between political connections and occurrence and intensity of financial restatement. Therefore, it seems that the firms' accounting information quality is impacted by their political connections.

Related  party  transactions maybe opportunistically  used  by managers  for personal  gain. Ther efore, companies with the Related  party  transactions  with the manipulation  of  financial  statements  using  specific  accounting techniques, which  increases  the  likelihood  of  financial  statements  being  reproduced. On the other hand, one of  the most important issues affecting corporate reporting policies is political communication. Therefore, based on these arguments, the present study aimed to investigate the impact of political communication  on  the  relationship with  related  parties and the  Restatement of  Financial Statements. For this purpose, a sample of 145 companies listed  in Tehran Stock Exchange during 2011-2017 was selected and their information was analyzed using Logit Pattern Regression model(Logistic Regression). The results of the testing of research hypotheses show that Related party transactions have a significant positive effect on the Restatement  of  Financial Statements. Political communication (measured by government institutional ownership) also reduces  the  positive  relationship  between  Related  party  transactions  and  the Restatement  of  Financial Statements, and  political  communication (measured by state-owned  major  shareholder) also increases  There is a positive relationship between Related party transactions and Restatement of Financial Statements.

The aim of this study is to investigate Modifying Impact of Political connections with the relationship between Managers Ability and Restatement of Fraudulent financial statements and Probability of bankruptcy Companies in Tehran Stock Exchange. These three dimensions Restatement of Fraudulent financial statements in our tests: (Financial Statement Restatement, Restatement increase and Revised downward (and Dimensions Probability of bankruptcy in our tests Altman Modified Model. For this purpose six hypotheses are developed and data on the 103 companies in Tehran Stock Exchange for the period of 1390 to 1396 were analyzed. This regression model using panel data with Logit model and tests.  The results showed that the Managers Ability has significant Negative impact on Restatement of Fraudulent financial statements and Probability of bankruptcy. Also the results showed that the Political connections has significant negative impact on Restatement of Fraudulent financial statements and Probability of bankruptcy. Moreover the results showed that the Political connections has significant negative impact the relationship between Managers Ability and Restatement of Fraudulent financial statements and Probability of bankruptcy.

The present paper is principally dealing with the impacts of political connections on the value-based management and performance efficiency indicators. For this purpose, the indicators of public companies and the percentage of institutional ownership of quasi-public companies were investigated to measure the political connections of companies, while factors “human resource productivity” and “investment” were included to assess operating efficiency.  Data over the companies active in Tehran Stock Exchange were collected for 113 companies for 10 years from 2008 to 2017, and then analyzed adopting regression models “ordinary least squares (OLS)” and “generalized method of moment (GMM)” provided in Eviews 9.5.  As with results, there is a positive relationship between public companies and value-based management (VBM) rating, while a negative significant relationship is observed between VBM rating and public institutional-owned companies. Besides this, there is a positive significant relationship between public companies and operating efficiency in terms of human resource productivity, while such a relationship is negative and significant in terms of investment efficiency. further, there is a negative significant relationship between quasi-public companies and both indicators of operating efficiency. Considering the relationship between quasi-public companies, operating efficiency, and value creation, we can state that the existence of a political relationship does not amend managers' supervisory behavior but yet enhances agency costs. The correct enforcement of Article 44 of the Constitution and supporting and triggering the real private sector to invest in these domains seems, therefore, as a mechanism that is capable of diminishing the impacts of quasi-public companies in the economic settings and creating a competitive environment.