Iranian Journal of Trade Studies

Iranian Journal of Trade Studies

Explaining the Effects of Currency Redenomination(Deletion of Zeros) on Accounting and Financial Reporting

Document Type : Regular Papers

Authors
samira abasi
Sayyed Abbas Borhani
mojgan Safa
yaser sadeghi
Department of Accounting,Qo.C,Islamic Azad University,Qom,Iran.
10.22034/ijts.2026.2085208.4243
Abstract
Although currency redenomination is theoretically regarded as a nominal adjustment, it has complex
implications for accounting and affects the quality of financial reporting and information transparency. This
study aims to identify and explain the effects of deleting currency zeros on the Iranian accounting system
using a mixed-methods approach. In the qualitative phase, 10 core categories were identified through
content analysis of interviews with 15 experts. Their validity was confirmed using Lawshe’s Content Validity
Ratio (CVR > 0.49), and their reliability was established using Cohen’s Kappa coefficient (0.766). In the
quantitative phase, the developed model was tested with 385 auditors using Structural Equation Modeling
(SEM), and the model demonstrated a good fit based on the fit indices (RMSEA = 0.074 and CFI = 0.900).
The findings showed that the strongest significant relationship was between the unit of measurement
and the reduction in reporting quality (r = 0.899), while a change in the monetary scale increased the risk
of information misstatement (r = 0.779) and weakened the comparability of historical data. In addition, the
confirmation of behavioral effects indicated the occurrence of money illusion among users. The results
indicate that inconsistencies between monetary institutions and accounting standard-setting authorities
weaken the comparability of financial statements and increase the risk of repeated restatements. The study
concludes that the success of this policy depends on strengthening accounting infrastructure, developing
comprehensive disclosure frameworks for adjusting comparative figures, and ensuring coordination between
monetary policies and accounting standards, thereby preventing declines in transparency and the misleading
of stakeholders in the capital market.
Keywords
Currency redenomination
Financial reporting
Accounting measurement unit
Financial informationquality
Disclosure
Subjects
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  • Receive Date 11 February 2026
  • Revise Date 01 June 2026
  • Accept Date 18 July 2026