Accounting and Auditing Research

Accounting and Auditing Research

The Interactive Role of the Earning Quality on the Financial Leverage Sensitivity Against Gross Product Domestic and Assets Volume Changes in Iranian Banks

Document Type : Original Article

Authors
Ali Kamali 1
Seyed Yousef Ahadi Serkani 2
Ali Amiri 3
Hojjat Allah Salari 3
1 Ph.D student in Accounting at Islamic Azad University, Bandar Abas Branch, Bandar abas, Hormozgan, Iran
2 Associate Professor at Islamic Azad University, Firoozkooh Branch, Firoozkooh, Iran
3 Assistance Professor at Islamic Azad University, Bandar Abas Branch, Bandar abas, Hormozgan, Iran
10.22034/iaar.2020.112783
Abstract
The financial crisis of 2007-2009 drew special attention to the role of accounting values and leverage management in banking activities in many scientific studies. To analyze the stages of financial crises, some scholars argue that accounting methodology and the volume of Assets is of pivotal significance in this regard. In this study, based on the results of Granger Causality Test, the relationship between two factors, chanes in assets volume and the GDP, as independent variables with changes in the financial leverage as dependent variables in 15 banks was investigated in the period between 2009 and 2016. Then, the interactive effects of earning Quantity as a factor defining accounting approaches was analyzed using multiple regression and panel data (fixed and random effects). The results reveal that changes of The GDP has a significantly positive correlation with the changes in the financial leverage The findings also demonstrate that there is a significantly positive correlation between changes of assets volume and changes in financial leverage. The interactive role of Earning quality, is incremental.
Keywords
Earning Quality
Financial Leverage
GDP
Leverage Cycle
Accounting and Auditing Research
Volume 12, Issue 46
Summer 2020
Pages 113-132