The purpose of this research is to examine the effect of institutional ownership and the characteristics of the audit committee on changing the opportunistic classification of profit and loss statement items in the Tehran Stock Exchange. Hypotheses testing has been done using generalized least squares regression with panel data approach for the period of 2017 to 2023 using the information of 144 companies by systematic elimination sampling method.
The results of the research showed that managers manage profits by changing the classification of financial statement items. Also, the results indicated that institutional ownership and the characteristics of the audit committee, including the size and independence of the audit committee and the financial expertise of the audit committee, cause Reducing profit management through changing the opportunistic classification of profit and loss statement items. In fact, the large number of members of the audit committee, especially with expertise and independence, and due to the existence of various expertise and experiences, has led to effective monitoring of the financial reporting process. It reduces profit management by changing the classification of profit and loss items. and the ability of this supervisory tool to reduce fraudulent management through changing the classification of financial statement items is strong. In other words, as the ownership percentage of institutional investors increases, their supervision in the company increases, and as a result, it causes a decrease in profit management due to the opportunistic change in the classification of profit and loss statement items.