The Relationship between Earnings Management, Related Party Transactions and Firm Performance with the Mediation of the Role of Internal Control

Abstract

The main purpose of the current research was to determine the relationship between profit management, transactions with related parties and company performance with the moderating role of internal control in companies listed on the Tehran Stock Exchange during the years 2013 to 2021. This research is from the perspective of the implementation process of a quantitative research, from the perspective of the result of its implementation, an applied research, from the perspective of the goal of conducting an analytical research, from the perspective of the logic of conducting a deductive-inductive research, and from the perspective of the time dimension of a longitudinal research. So it is an event. The information used in this research was collected using the library method and the software of Rehvard-Noin and Tadbir Pardaz and the database of the Statistics Department of the Stock Exchange Company. The studied population was all the companies accepted in the Tehran Stock Exchange, 121 companies were selected as a statistical sample by systematic elimination method. In this research, Excel software was used for data processing and Eviews software was used for data analysis. The results of the panel data model showed that there is a positive and significant relationship between real profit management and accrual-based profit management with the financial performance of companies. The results showed that the quality of internal control can play a moderating role on the relationship between real profit management and financial performance of companies. In other words, the results showed that the quality of internal control can increase the effect of real profit management on the financial performance of companies from 0.2267 to 0.2837 units.