Investigating the Relationship between Social Responsibilities and Financial Sustainability with a Focus on Moderating Role of Fraudulent Reporting and Financial Constraints

Abbas Ezzatikia¹ Soheila Torgheh² Mohammad Khatiri³

1) Department of Accounting, Tak.c., Ialamic Azad University, Takestan, Iran.
2) Department of Accounting, Tak.c., Ialamic Azad University, Takestan, Iran (Corresponding Author).
3) Department of Accounting, Tak.c., Ialamic Azad University, Takestan, Iran.

IOI Code : AAHC-ABKHZG
Publication : National Conference on Management, Commercialization, Knowledge-Based Economy and Investment for Production(impeb.ir)
Abstract :
    Improving financial sustainability requires a systemic view of three interrelated factors. The key proposal is to establish a virtuous cycle among them: by strengthening corporate governance and transparency—thereby reducing fraudulent reporting—investor confidence grows and financial constraints ease. The freed‑up resources can then be channeled into targeted investments in social responsibilities (especially in governance and environmental dimensions), which in turn further reinforces corporate governance and diminishes incentives for fraud. This integrated approach offers the most sustainable path to ensuring an organization’s long‑term success. From this perspective, the present study investigates the relationship between social responsibilities and financial sustainability, with a particular focus on the moderating role of fraudulent reporting and financial constraints. The research method is descriptive‑correlational, with an experimental design using an ex‑post‑facto approach. To test the research hypotheses, multiple linear regression based on panel data—combining cross‑sectional and time‑series data—was employed, and the researcher used statistical and econometric methods to examine the effect of the independent variable on the dependent variable. In the next step, to answer the research questions, data from 122 firms listed on the Tehran Stock Exchange over a ten‑year period (from the beginning of 2015 to the end of 2024) were extracted and subjected to the necessary statistical tests.‌‌ The findings indicate a positive and significant relationship between social responsibilities and financial sustainability; fraudulent reporting significantly moderates this relationship, and financial constraints also have a significant moderating effect. However, the simultaneous moderating effect of fraudulent reporting and financial constraints on the relationship between social responsibilities and financial sustainability was not found to be significant.

Keywords : social responsibilities financial sustainability fraudulent reporting financial constraints