"The Role of Political Connections on the Relationship between Corporate Governance and Management Accounting in Companies Listed on the Iranian Stock Exchange: A Machine Learning and Neural Network Approach"

Abstract

The main objective of this research is to examine the impact of political connections on the relationship between corporate governance and management accounting in companies listed on the Tehran Stock Exchange. The statistical population includes listed companies during the period from 2008 to 2023. This study is descriptive-correlational and utilizes both parametric and non-parametric statistical models. Various machine learning methods, including random forests, decision trees, SVM, and neural networks, were used for data analysis. Results indicate that variables such as the percentage of institutional shareholders (IO) and the percentage of government ownership (GO), as indicators of political connections and corporate governance, have a significant impact on the application of management accounting. Additionally, the interaction of these two variables (IO*GO) shows high importance in the model, demonstrating the influence of political connections on the relationship between corporate governance and management accounting. Moreover, profitability (PROF) and company size (SIZE) were identified as important factors affecting the implementation of management accounting. The neural network analysis results show that political connections play a significant role in shaping the relationship between corporate governance and the application of management accounting. The composite variable IO*GO (interaction between institutional shareholders and government ownership) has shown the most significant impact on this relationship. These findings indicate the profound influence of political connections on governance structures and management decisions in Iranian companies. This research emphasizes the complexities arising from the intersection of political and economic interests, suggesting the need for a review of macroeconomic policies and the establishment of more effective regulatory mechanisms. This study can assist policymakers and regulatory bodies in improving transparency, increasing efficiency, and enhancing Iran's position in international business indices. In other words, the present research emphasizes the importance of reforming existing structures and creating effective control mechanisms in the country's macroeconomic policies. It also highlights the necessity of creating a healthy and fair competitive environment in Iran's economy and strengthening anti-monopoly and conflict of interest laws. This study can help policymakers and regulatory bodies improve the business environment, increase transparency, and enhance Iran's position in international indices.