Abstract

Financial reports are the basis of economic decisions affecting the interests of the organization and ultimately the owners; however, there are serious gaps in conducting researches on the factors affecting the quality of the profit. Therefore, considering the importance of providing quality financial information, the present study investigates the relationship between intellectual capital components and the quality of profits. Because in today's knowledge-based economy, intellectual capital is known as a very important factor for creating value and gaining competitive advantage. Data (the intellectual capital and profit variables of 123 stock exchange companies in 2007-2012) were collected and analyzed using regression method. Results show that, among the components of intellectual capital, structural capital has a significant correlation with the quality of profit and there is no significant relationship between human capital and communicative capital with the quality of profit. Accordingly, organizations need to pay a lot of attention to the structural capital as a powerful source for improving their business in order to deliver higher-quality profits, leading to proper decision-making and consequent capital market prosperity.