Document Type : Research Paper

Authors

• Sima Yousefi Moghadam ¹
• Allah Karam Salehi ²
• Hoshang Amiri ³

¹ Department of Accounting, Khoramshahr International Branch, Islamic Azad University, Khoramshahr, Iran

² Department of Accounting, Faculty of Humanities, Masjed-Soleiman branch, Islamic Azad University, Masjed-Soleiman, Iran

³ Department of Accounting, Abadan Branch, Islamic Azad University, Abadan, Iran

Abstract

Profit forecasting by management is one of the mechanisms through which management provides information about the company's future profitability status. This research has been conducted with the aim of providing a model to identify factors affecting the accuracy of management profit forecasts in Iranian companies on the Tehran Stock Exchange.
his research is applied in terms of purpose and correlational in terms of nature. In order to achieve the goal of the research, 131 companies were selected from among the companies admitted to the Tehran Stock Exchange during the years 2010 to 2019 by systematic elimination and considered as the main sample. Bayesian averaging and dynamic averaging approaches have been used to determine the optimal model. Based on the results of BMA, TVP-DMA, TVP-DMS, BVAR and OLS models to identify the most important influencing variables on the accuracy of management profit forecast, the BMA model had the highest efficiency. Based on this, 50 identified variables affecting the accuracy of management profit forecasting were entered in the Bayesian averaging model (in 5 audit categories; financial ratios; macroeconomic variables; corporate and managerial governance indicators) and based on previous probabilities, 13 variables were identified as important variables. These variables include management profit forecasts of the past period; Profit or loss of the company; discretionary accruals; type of industry; the existence of the audit committee; Financial Leverage; operational debt leverage ratio; return on equity; economic uncertainty; economic growth fluctuations; swelling; Accrued profit management and management ability. According to the results of the research, several factors influence the management profit forecast, and this indicated the multi-dimensionality of the management profit forecast, and this indicates the fact that managers need to have a systemic perspective in order to reduce the management profit forecast error.

Keywords

• profit management
• Bayesian
• TVP-DMA