Design the Fuzzy Variable to Determine the Relation Between Price and
Assessment
SEYED MAHMOOD HASHEMI
KAR High Education Institute, QAZVIN branch
Qzvin, Alvand, IRAN
Abstract: - Accounting produces information that is used for decision-making, so helpful standards of accounting
are required. One of the challenging aspects of accounting is trade assessment. This subject is important in the
buying process (and also in the fund management). In the buying process, customers are looking for trades with
high profit, but determining the exact value for the profit is hard. Profit is categorized into Cash and Obligation.
In this paper, the spread of cash operation is considered as a cash component, and the difference in the receive
accounts, the difference in the inventory, and the difference in the payment accounts are considered as
obligations. To examine, the financial information of 10 trades in the TEHRAN EXCHANGE STOCK are used.
In this paper to determine the relation between the assets and the real price, a fuzzy approach is used. Fuzzy
systems include some components and diversity in each of them may influence the final result. Therefore the
influence of each fuzzy component needs to be examined, but the goal of this paper is to use the fuzzy system.
Hence we use a simpler shape of fuzzifier, defuzzifier, and inference engine.
Key-Words:- Accounting, Assessment, Obligation, Cash, Profit, Fuzzy System
Received: November 26, 2022. Revised: August 25, 2023. Accepted: September 24, 2023. Published: October 31, 2023.
1 Introduction
The major goal of financial reporting is to help the
investor in decision-making, so the profit
assessments of trades have a critical role in this play.
The profit accounted is based on the obligation, so
there is a difference between the accounted profit
and the report of the cash steam. The decomposition
of profit into the obligation and cash reduces the
error forecasting. These parts of information are
considered as the parameters for trade profit. Indeed
there is a need for a variable that explains and
forecasts the price of stocks. There are some
weaknesses in the previous research: firstly there is
no special structure to combine exercises; secondly,
most research is based on linear regression, so they
are limited to the cross-sectional variations.
2 Related Works
Moorthy et al. focus on the green accounting in their
work [1]. Green accounting is related to
environmental information. An important function
of green accounting is to bring environmental costs
to the attention of corporate stakeholders. They
number seven measures, but four of them are more
important. Pollution prevention costs, environmental
protection costs, costs of resource recycling, and
environmental restoration costs.
Du et al. consider the account management in China
[2]. Management accounting itself is to provide
information and solutions for business operations
and decisions. There are some crucial factors for
small and medium-sized enterprises such as human
factors.
The main goal of Liu et al. work is to analyze the
situation of the development of small and medium-
sized accounting firms in Jing Zhou City (China)
[3]. They found the internal risk governance
mechanism is directly related to the quality
management and risk control of the entire firm. They
believe one of the most important human resources
for small and medium-sized firms is their personnel
quality.
Zhang researches about the relationship between
state-owned enterprises and the government reduces
the utility of accounting information [4]. He studies
in soundness accounting information and finds there
is a need to deal with, this because if there is no
robustness requirement in the accounting recognition
measurement principles, profits, and cash flows will
converge over the long term, and accruals will tend
to be reversed so that the cumulative accruals will be
International Journal of Electrical Engineering and Computer Science
DOI: 10.37394/232027.2023.5.18
Seyed Mahmood Hashemi
E-ISSN: 2769-2507
171
Volume 5, 2023
zero. He proposed three formulas for accrual
accounting. In the next step, he proposed an
optimization model to test.
Moron et al. study the usage of the artificial
intelligence in the accounting [5].
In [6, 7], authors investigate various techniques in
the accrual accounting.
Grandis et al. answer the question that which
variables are needed for accrual accounting [8].
They analyze the data of the none-business-oriented
companies.
Bhasin investigates fraud on a large scale [9]. In that
work, the author describes the scenario of SATYAM
company in INDIA and the reason of require to the
creative accounting (CA).
Liu introduces cashlet accounting defined as a basic
accounting concept with a value of negative one
[10]. Accounting is an approach to finding the nature
of companies and some tools such as GRAPH can
help to understand.
Yan studies the evaluation of the fund production
process in CHINA within 20 years [11]. He uses
three methods (CAPM model, FFC four-factor
model, and CPZ seven-factor model) to find the
situation of China's open-end fund markets.
Upadhyaya et al. analyze the stock trades to assess
whether they are taking advantage of diversification
[12]. The main subject is the evaluation of 8 mutual
funds.
Chang et al. investigate the maximization of the
companies' profit [13]. They test the fund strategies
of TAIWAN companies.
5 Problem Expression
Let there be a firm with a special amount (A) of
assets. The assets of the firm are divided into the
cash (C) and obligation (O). Therefore when the
stocks of this firm are released, both parts of the
assets are considered. Indeed the other variable (V)
has been considered to recognize the relation
between the amount of assets (C+O) and the real
price. In other words, there is a need for an extra
accounting component (more than the formal
accounting components) to find the accrual benefit
of the stocks.
The common approach to compute “V” is the
aggregation. In that method, every asset (such as
cash and obligation) has its coefficient, so the total
value of "V" is equal to the summation of cash and
obligation multiple to their coefficients. The
problem of this way is having the correct value of
coefficients.
The other way, that is used in this work, is using of
FUZZY SYSTEM. In this proposed approach, firstly
we create a fuzzy set for each part of the assets and
then we compute the total value for "V" as the result
of the fuzzy system.
3 Proposed Approach
There is a need to find a variable that shows the
relationship between assets (cash and obligation) and
the real price. In this work, we proposed the fuzzy
system. The first step in the fuzzy is set define. In
the fuzzy system, for each input variable (in this
problem cash and obligation) a fuzzy set is defined,
which is shown in the FIG. 1.
FIG. 1. Membershpm sets of the inputs
We can name each set as 'bad', 'normal', and
'perfect'. All input variables are determined based on
the MEMBERSHIP in these sets.
We design two fuzzy sets for output (FIG. 2).
FIG. 2. Membership sets of the outputs
In the second step, there is a need for an
INFERENCE ENGINE. The function that is called
the inference engine has a role as the heart of the
system and determines the main computation of the
fuzzy system.
(1)
International Journal of Electrical Engineering and Computer Science
DOI: 10.37394/232027.2023.5.18
Seyed Mahmood Hashemi
E-ISSN: 2769-2507
172
Volume 5, 2023
The third step is the definition of a set of rules. Rules declare the relation between inputs and outputs.
FIG. 3. Rules
According to the defined rules and based on the trade information, the following information is produced:
Table 1. Results
Cash
Obligation
Price
0.498572
0.257569691
0.205026
0.142947
0.895070841
0.413985
0.506214
0.705629404
0.566864
0.587545
0.38177241
0.401781
0.53515
0.888695867
0.634908
0.105293
0.796781748
0.55901
0.479564
0.088248344
0.068649
0.169665
0.349417634
0.43453
0.555427
0.900380128
0.689795
0.85691
0.240038143
0.163025
The results are after the normalization process, they are between 0 and 1.
6 Conclusion
In this paper, an approach based on the fuzzy system
is proposed to help decision-making about assets.
Components of the fuzzy system can be in different
modes that may influence the final results, so the
examination of other components is good.
References:
[1]. Krishna Moorthy, Peter Yacob, “Green
Accounting: Cost Measures”, Open Journal of
Accounting, 2013, 2, 4-7
1. If (input1 is bad) and (input2 is bad) then (output1 is rejected) (1) '
'2. If (input1 is bad) and (input2 is normal) then (output1 is rejected) (1) '
'3. If (input1 is bad) and (input2 is perfect) then (output1 is rejected) (1) '
'4. If (input1 is normal) and (input2 is normal) then (output1 is accepted) (1) '
'5. If (input1 is normal) and (input2 is perfect) then (output1 is accepted) (1) '
'6. If (input1 is perfect) and (input2 is bad) then (output1 is rejected) (1) '
'7. If (input1 is perfect) and (input2 is normal) then (output1 is accepted) (1) '
'8. If (input1 is perfect) and (input2 is perfect) then (output1 is accepted) (1)'
International Journal of Electrical Engineering and Computer Science
DOI: 10.37394/232027.2023.5.18
Seyed Mahmood Hashemi
E-ISSN: 2769-2507
173
Volume 5, 2023
[2]. Bingxin Du, Jiaxu Jiang, Xiuzhi Ji, “Research
on the Development of Management Accounting in
Small and Medium-Sized Enterprises in China”,
Open Journal of Accounting, 2018, 7, 19-24
[3]. Bangling Liu, Hong Zhou, Xiao Pei, “Strategic
Analysis of the Development of Small and Medium-
Sized Accounting Firms in Jing Zhou”, Open
Journal of Accounting, 2020, 9, 51-59
[4]. Weihua Zhang, “Accounting Conservatism and
Private Enterprise Debt Financing Research”, Open
Journal of Accounting, 2023, 12, 15-25
[5]. Camille E. Moron, Chester Owen B. Diokno,
“Level of Readiness and Adoption on the Use of
Artificial Intelligence Technologies in the
Accounting Profession”, Open Journal of
Accounting, 2023, 12, 37-54
[6]. Nousheen Tariq Bhutta, Syed Zulfiqar Ali Shah,
“Tutorial Accounting Fundamentals: A New Look
of British and American Accounting System”, Open
Journal of Accounting, 2013, 2, 16-18
[7]. Rezvan Hejazi, Ameneh Bazrafshan, “The
Survey of Graduated Accounting Students’ Interest
in Management Accounting: Evidence of Iran”,
Open Journal of Accounting, 2013, 2, 87-93
[8]. Fabio Giulio Grandis , Giorgia Mattei, “Is There
a Specific Accrual Basis Standard for the Public
Sector? Theoretical Analysis and Harmonization of
Italian Government Accounting”, Open Journal of
Accounting, 2012, 1, 27-37
[9]. Madan Lal Bhasin, “Creative Accounting Scam
at Satyam Computer Limited: How the Fraud Story
Unfolded?”, Open Journal of Accounting, 2016, 5,
57-81
[10]. Ting-Kai Liu, “Cashlet Theory: Discovering
the Nature of Accounting”, Open Journal of
Accounting, 2017, 6, 11-32
[11]. Shili Yan, “The Evaluation of the Lucky
Component of Open-End Fund Performance Based
on Bootstrap Method”, American Journal of
Industrial and Business Management, 2020, 10,
1039-1057
[12]. Tara Prasad Upadhyaya, Sirjana Chhetri,
“Performance Base Empirical Analysis of Mutual
Fund of Nepal”, Journal of Financial Risk
Management, 2019, 8, 43-54
[13]. Feng-Huei Chang, Yeong-Jia Goo, “Are Fund
Investors Treated Fairly? An Investigation of
Taiwan Fund Company Strategies”, Theoretical
Economics Letters, 2022, 12, 945-962
International Journal of Electrical Engineering and Computer Science
DOI: 10.37394/232027.2023.5.18
Seyed Mahmood Hashemi
E-ISSN: 2769-2507
174
Volume 5, 2023
Contribution of Individual Authors to the
Creation of a Scientific Article (Ghostwriting
Policy)
The author contributed in the present research, at all
stages from the formulation of the problem to the
final findings and solution.
Sources of Funding for Research Presented in a
Scientific Article or Scientific Article Itself
No funding was received for conducting this study.
Conflict of Interest
The author has no conflict of interest to declare that
is relevant to the content of this article.
Creative Commons Attribution License 4.0
(Attribution 4.0 International, CC BY 4.0)
This article is published under the terms of the
Creative Commons Attribution License 4.0
https://creativecommons.org/licenses/by/4.0/deed.en
_US
