Artificial Intelligence Approach Analyzing Management Ability Based on Accounting and Corporate Governance Criteria

Abstract

The aim of this research is the analysis of management ability using accounting and corporate governance criteria and also artificial intelligence. The primary independent variables in this study include regulatory variables (characteristics of corporate governance and audit committee) and accounting variables (performance and risk criteria). We took advantage of Demirjian index to measure management ability. The empirical findings Of 178 companies listed in Tehran Stock Exchange from 2011 to 2017 indicate that using least angle regression approach, systematic risk variables, management alteration, ownership concentration, financial expertise of the audit committee members and stock returns have a higher power explaining management ability. Analyzing these results, we can say that economic, political and regulatory issues can further affect management ability to measure their performance. Also among other results obtained here we can mention that in management and accounting, to explain and predict continuous financial variables such as management ability, we can take advantage of Fourier online gradient descent approach that has high predictive power.