The role of internal controls on the relationship between corporate financial constraints and cost stickiness

Articles in Press

Document Type : Original Article

Author

Assistant Professor, Department of Accounting, Payame Noor University,Tehran. Iran.

10.22034/iaas.2023.345648.1290

Abstract

The main purpose of this study is to investigate the role of internal controls on the relationship between corporate financial constraints and cost stickiness. Cost stickiness is one of the characteristics of cost behavior in relation to changes in activity level and shows that the rate of increase in costs when the level of activity increases is greater than the rate of decrease in costs when the level of activity decreases.The main purpose of this study is to investigate the role of internal controls on the relationship between corporate financial constraints and cost stickiness. The present study is applied and from a methodological point of view, causal (post-event) correlation. The statistical population of the study is all companies listed on the Tehran Stock Exchange and using the systematic elimination sampling method, 132 companies were selected as the research sample and were examined over a period of 8 years between 1392 and 1399. The results of testing the research hypotheses showed that in the first hypothesis, there is a direct and significant relationship between financial constraints and cost stickiness. The results of the second hypothesis also showed that internal control has a moderating role on the relationship between financial constraints and cost stickiness. In fact, weakness in internal control intensifies the positive relationship between financial constraints and cost stickiness.

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Main Subjects

Accounting and Auditing Studies

Articles in Press, Accepted Manuscript
Available Online from 17 January 2024

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