The relationship between cost stickiness and financial reporting quality in Tehran Stock Exchange

2018 ◽  
Vol 67 (9) ◽  
pp. 1550-1565 ◽  
Author(s):  
Mahdi Salehi ◽  
Nasrin Ziba ◽  
Ali Daemi Gah
Keyword(s):  
Financial Reporting ◽  
Design Methodology ◽  
Stock Exchange ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Statistical Software ◽  
Testing Hypotheses ◽  
Content Type ◽  
The Relationship ◽  
Cost Stickiness

Purpose The purpose of this paper is to investigate the relationship between financial reporting and cost stickiness in companies listed on the Tehran Stock Exchange. Design/methodology/approach Data of all Iranian manufacturing listed companies gathered for testing hypotheses during 2010–2016 and R statistical software are employed in order to analyzing data. Findings The results of this study indicate that there is a significant relationship between administrative, sale, material, labor and overhead costs and the financial reporting qualities of the companies under study. Originality/value The study focuses on relationship between financial reporting and cost stickiness in companies listed on the Tehran Stock Exchange, which is the first study of its type in Iran.

Financial reporting quality and firms’ information environment: a case of Iranian firms

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yasser Rezaei Pitenoei ◽  
Mehdi Safari Gerayli ◽  
Ahmad Abdollahi
Keyword(s):  
Financial Reporting ◽  
Capital Market ◽  
Stock Exchange ◽  
Reporting Quality ◽  
Information Environment ◽  
Financial Reporting Quality ◽  
Multivariate Regression Model ◽  
Content Type ◽  
Composite Measures ◽  
The Relationship

Purpose The purpose of this study is to investigate the relationship between financial reporting quality and information environment (IE) in firms listed on the Tehran Stock Exchange (TSE). Design/methodology/approach In this study, composite measures were used as the proxy to measure financial reporting quality and IE. In this regard, a sample of 1,490 firm-year observations of the firms listed on the TSE during the years 2008 to 2017 and a multivariate regression model was used to examine the research hypothesis. Findings Findings indicate that financial reporting quality has a positive relationship with firms’ IE. This result is robust to the alternate measure of financial reporting quality and endogeneity problem. Originality/value The present study is the first study to develop a composite measure for the firms’ IE in the Iranian capital market. As a result, it not only expands the theoretical literature on the firms’ IE but also helps policymakers, regulators, investors and financial reporting users make informed decisions.

Family ownership and financial reporting quality: Iranian evidence

2018 ◽  
Vol 8 (3) ◽  
pp. 339-356 ◽  
Author(s):  
Mahmoud Mousavi Shiri ◽  
Mahdi Salehi ◽  
Fatemeh Abbasi ◽  
Shayan Farhangdoust
Keyword(s):  
Financial Reporting ◽  
Family Firms ◽  
Stock Exchange ◽  
Accounting Information ◽  
Reporting Quality ◽  
Audit Fees ◽  
Financial Reporting Quality ◽  
Family Ownership ◽  
Content Type

PurposeIn the process of reporting accounting information, the auditor’s objective is to detect possible misstatements and errors in accounting information. Audit evidence aids auditors in providing reasonable assurance about the quality of financial reporting. Studying the quality of family firms’ financial reporting is of higher importance relative to non-family firms due to lower risk of accounting manipulation. Therefore, the purpose of this paper is to examine the relationship between family ownership structure and financial reporting quality from an auditing perspective.Design/methodology/approachTo analyze the research hypotheses, the authors use a sample data consisted of 221 companies listed on the Tehran Stock Exchange (including 52 family and 169 non-family firms) over a five-year span from 2011 to 2015.FindingsUsing multivariate regression analysis of panel data, our results indicate that audit risk in family firms is lower than their counterparts. Likewise, the findings are indicative of lower audit fees paid by family firms as compared to non-family ones. The authors also find that auditors put more effort in family firms and thus audit effort is more significant for these kinds of firms.Originality/valueThe study focuses on family ownership and financial reporting quality in a developing country like Iran and the results of the study may be beneficial to other developing nations, as Iran stock market possesses some unique features which are not normally prevailing in other equity markets, even in the Middle East.

Integrated reporting, financial reporting quality and cost of debt

2020 ◽  
Vol 28 (3) ◽  
pp. 517-534 ◽  
Author(s):  
Mohammad Badrul Muttakin ◽  
Dessalegn Mihret ◽  
Tesfaye Taddese Lemma ◽  
Arifur Khan
Keyword(s):  
Financial Reporting ◽  
Stock Exchange ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Cost Of Debt ◽  
Inverse Association ◽  
Integrated Reporting ◽  
Financial Reports ◽  
Content Type ◽  
Debt Market

Purpose Although proponents of integrated reporting (IR) advocate that this emerging practice has the potential to transform corporate reporting, the eventuation of this expectation would depend on the incentive IR provides to firms. This study aims to examine whether IR is associated with cost of debt and whether IR moderates the relationship between financial reporting quality and cost of debt. Design/methodology/approach Based on insights drawn from information asymmetry and agency theories, the authors develop models that link IR and financial reporting quality with a firm’s cost of debt. The authors analyze 847 firm-year observations drawn from non-financial firms traded on the Johannesburg Stock Exchange, for the period between 2009 and 2015. Findings The authors find that firms that provide integrated reports tend to have a lower cost of debt than those do not provide IR. The authors also find an inverse association between financial reporting quality and cost of debt, and that integrated reports accentuate this association. The findings suggest that the debt market perceives value in the information presented in integrated reports beyond what is furnished in financial reports. Originality/value To the best of the authors’ knowledge, this study is the first to document evidence suggesting that the debt market perceives value in the information presented in integrated reports, beyond what is furnished in financial reports.

Financial reporting quality and share price movement-evidence from listed companies in Bangladesh

2020 ◽  
Vol 18 (3) ◽  
pp. 425-458
Author(s):  
Md. Mamunur Rashid
Keyword(s):  
Financial Reporting ◽  
Stock Exchange ◽  
Reporting Quality ◽  
Share Price ◽  
Financial Reporting Quality ◽  
Annual Reports ◽  
Developing Economy ◽  
Price Movement ◽  
Content Type ◽  
Qualitative Characteristics

Purpose The purpose of this study is to examine the effect of financial reporting quality (FRQ) on share price movement (SPM) of listed companies in an emerging and developing economy – Bangladesh. Design/methodology/approach The study analyzed 296 annual reports for the year 2015 and 2016 in examining the effect of FRQ on SPM. Ordinary least squares (OLS) regression model is used to examine the hypothesized relationship among the variables. A modified version of Lang et al. (2003) has been adopted in measuring the SPM. FRQ is measured using the qualitative characteristics approach as defined by the International Financial Reporting Standard Framework and used by Beest et al. (2009) and Braam and Beest (2013). Findings The study finds a positive association (though not significant statistically) between the FRQ and SPM in the country’s leading stock exchange (Dhaka stock exchange). Furthermore, the effect of enhancing quality on SPM is found to be stronger as compared to fundamental quality. Majority of the FRQ constructs demonstrate an improvement in the quality score in the year 2016 as compared to 2015 except for relevance. Research limitations/implications The key limitation of the study is that it focuses only on two years (2015 and 2016) annual reports data in measuring FRQ and its effect on SPM. Originality/value The study uses qualitative characteristics approach in measuring the FRQ and to examine its effect on SPM using the context of an emerging and developing economy – the case of Bangladesh.

Audit committee impact on the quality of financial reporting and disclosure

2016 ◽  
Vol 39 (12) ◽  
pp. 1639-1662 ◽  
Author(s):  
Mahdi Salehi ◽  
Mohammadamin Shirazi
Keyword(s):  
Financial Reporting ◽  
Audit Committee ◽  
Stock Exchange ◽  
Panel Data Analysis ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Fiscal Year ◽  
Corporate Disclosure ◽  
Content Type

Purpose The purpose of this study is to shed further light on the characteristics of an audit committee (AC) and its probable relationship with the quality of financial reporting and disclosure. Based on the findings of extant research that there are different factors that may have implications for the AC’ effectiveness, the authors posit an association between the aforementioned financial aspects and AC presence. Design/methodology/approach The authors test their hypotheses by performing panel data analysis on a sample of 100 companies listed on the Tehran Stock Exchange (TSE) during 2013-2014. The tests were conducted by using Eviews software. Findings Examining previously tested characteristics of an AC, the authors indicate that the number of AC meetings held during fiscal year is negatively associated with the quality of corporate disclosure, whereas AC expertise and size are positively associated with the quality firm’s financial disclosure. Their findings are also indicative of a non-significant relationship between other AC attributes and financial reporting quality (FRQ) except for AC independence, which is positively associated with FRQ. Finally, they provide some evidence that the size of a firm positively affects the quality of its financial reporting and disclosure. Research limitations/implications Although the study has been thoroughly considered and cautiously planned, some limitations have yet arisen. Initially, this research was conducted in an Iranian setting where the formation of ACs is on the verge of regulation; therefore, the data utilized for the study only contains the two-year period of ACs’ statutory activity. In addition, a lack of consensus on the precise measures of an AC’s effectiveness could be considered as a restrictive factor. Originality/value The authors’ study contributes to the AC literature by providing empirical evidence of an association between ACs’ different attributes and financial aspects in a newly regulated environment like the TSE. The results provided in this paper could be fruitful for auditors, regulators, institutional investors and policymakers.

scholarly journals The impact of good corporate governance practices on financial reporting quality: Empirical evidence from Jordanian listed companies

2012 ◽  
Vol 9 (4) ◽  
pp. 178-186 ◽  
Author(s):  
Khaled Erieg Abu-Risheh ◽  
Mo’taz Amin Al-Sa’eed
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Financial Reporting ◽  
Stock Exchange ◽  
Reporting Quality ◽  
Audit Committees ◽  
Financial Reporting Quality ◽  
Good Corporate Governance ◽  
Governance Practices ◽  
The Relationship

The main objective of this paper is to analyze the relationship between the good corporate governance practices on the financial reporting quality of Jordanian listed companies. Specifically, we focus on the board’s independence, board’s transparency, and separate audit committee. A listing of Share -Traded Jordanian Companies was available from the Amman Stock Exchange as of 31 December 2011. A total of (167) company shares were traded as of 31 of December 2011. It was decided to distribute (160) questionnaires to the related external auditors, the expertise members of the Audit Committees, and the Jordanian regulatory bodies that oversight the corporate reporting of those companies, which include the Jordanian Securities Commission, Insurance Commission, and Central Bank of Jordan. The empirical study is realized based on a sample of the companies listed on the Amman Stock Exchange. Our research results shows that the good corporate governance practices impact the financial reporting quality, were Independence is considered one of the determinants of the success of financial reporting quality (T = 3.709, 008) and (R= 0.676), in addition to that; the independent variables are able to explain the variance in the dependent variable, a multiple regression test was carried out to test the relationship between board of directors’ transparency, board of directors’ independence, and audit committees, and financial reporting quality (FRQ), they are able to explain nearly 0.805% (R=0.805% P< 0.000) of the variance in financial reporting quality. The correlation analysis allows testing the strength of relationships between several independent variables and one dependent variable, which is the case in this study. The results of correlation analysis shows that the relationships between boards of directors’ transparency, board of directors’ independence, and separate audit committees, and the dependent variable which is financial reporting quality (FRQ), are significant.

Audit committee and financial reporting quality: the moderating effect of audit quality

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sana Mardessi
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Audit Committee ◽  
Audit Quality ◽  
Reporting Quality ◽  
Moderating Effect ◽  
Real Earnings Management ◽  
Financial Reporting Quality ◽  
Content Type ◽  
The Relationship

Purpose The purpose of this study is to address the impact of audit quality on financial reporting quality proxied by real earnings management. To further clarify the mentioned links, this study empirically assesses the moderating effect of audit quality. Design/methodology/approach The study is based on a sample consisting of 90 non-financial companies that are listed in the Amsterdam stock exchange in AEX all share index over the 2010–2017 period. This study applies a quantitative approach and secondary data as the main source of information for analysis. This paper performs an ordinary least squares regression to examine the moderating effect of audit quality on the relationship between financial reporting quality. Findings Empirical findings demonstrate that corporate governance mechanism, mainly independence members, financial expert and audit committee size has a statistically significant relationship with real earnings management. However, the effect of audit committee meetings on real earnings management is not significant. There is also evidence that audit quality moderates the audit committee – real earnings management links. Originality/value This study extends the existing literature by examining the moderating effect of audit quality on the relationship between financial reporting quality proxied by real earnings management in the Dutch context.

The ISIS Impacts on the Political Connections, Board Interlock, and Quality of Financial Reporting

2021 ◽  
pp. 234779892110324
Author(s):  
Mahdi Salehi ◽  
Ali Zuhair Maalah ◽  
Hamideh Nazaridavaji
Keyword(s):  
Multiple Regression ◽  
Financial Reporting ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Political Connections ◽  
Islamic State ◽  
The Relationship

This research examines the relationship between political connections, board interlock, and the quality of financial reporting of the listed companies on the Iraq Stock Exchange (ISE) with ISIS's mediating role (the Islamic State of Iraq and Syria). This research is about the mediating part of ISIS in the relationship between board interlock, political connections, and financial reporting quality. The study attempts to reveal whether or not political connections and board interlock can improve financial reporting quality. A multiple regression model is used to test the research hypothesis. The samples consist of 245 (firm-year) companies listed on the ISE from 2012 to 2018, and the hypothesis is tested by multiple regression based on integrated data models. The results demonstrate a significant and negative relationship between political connections, board interlock, and financial reporting quality. Thus, higher political connections reduce the quality of financial reporting. The results also conveyed that ISIS contributes to the decline of this relationship. This research expands the literature review on ISIS’s impact on these engaged countries' economies.

scholarly journals A longitudinal study of the textual characteristics in the chairman’s statements of Guinness

2019 ◽  
Vol 32 (6) ◽  
pp. 1714-1741 ◽  
Author(s):  
Alonso Moreno ◽  
Michael John Jones ◽  
Martin Quinn
Keyword(s):  
Impression Management ◽  
Financial Reporting ◽  
Design Methodology ◽  
Reporting Quality ◽  
Financial Reporting Quality ◽  
Quantitative Character ◽  
Data Set ◽  
Content Type ◽  
Public Exposure ◽  
Practical Implications

Purpose The purpose of this paper is to longitudinally analyse the evolution of multiple narrative textual characteristics in the chairman’s statements of Guinness from 1948 to 1996, with the aim of studying impression management influences. It attempts to contribute insights on impression management over time. Design/methodology/approach The paper attempts to contribute to external accounting communication literature, by building on the socio-psychological tradition within the functionalist-behavioural transmission perspective. The paper analyses multiple textual characteristics (positive, negative, tentative, future and external references, length, numeric references and first person pronouns) over 49 years and their potential relationship to profitability. Other possible disclosure drivers are also controlled. Findings The findings show that Guinness consistently used qualitative textual characteristics with a self-serving bias, but did not use those with a more quantitative character. Continual profits achieved by the company, and the high corporate/personal reputation of the company/chairpersons, inter alia, may well explain limited evidence of impression management associated with quantitative textual characteristics. The context appears related to the evolution of the broad communication pattern. Practical implications Impression management is likely to be present in some form in corporate disclosures of most companies, not only those companies with losses. If successful, financial reporting quality may be undermined and capital misallocations may result. Companies with a high public exposure such as those with a high reputation or profitability may use impression management in a different way. Originality/value Studies analysing multiple textual characteristics in corporate narratives tend to focus on different companies in a single year, or in two consecutive years. This study analyses multiple textual characteristics over many consecutive years. It also gives an original historical perspective, by studying how impression management relates to its context, as demonstrated by a unique data set. In addition, by using the same company, the possibility that different corporate characteristics between companies will affect results is removed. Moreover, Guinness, a well-known international company, was somewhat unique as it achieved continual profits.

Regulatory changes and audit fees: the moderating effect of overlapping directorship and financial reporting quality

2020 ◽  
Author(s):  
Salau Olarinoye Abdulmalik ◽  
Ayoib Che-Ahmad
Keyword(s):  
Financial Reporting ◽  
Perceived Risk ◽  
Reporting Quality ◽  
Regulatory Reform ◽  
Audit Fees ◽  
Moderating Effect ◽  
Financial Reporting Quality ◽  
Content Type ◽  
Regulatory Changes ◽  
The Relationship

PurposeThis study examines the contemporaneous changes in the reporting regime in Nigeria by investigating the effect of regulatory changes on audit fees as well as the moderating effect of overlapping directorship and financial reporting quality.Design/methodology/approachThis study utilises a longitudinal sample of 409 firm-year observations, from 2008 to 2013, of nonfinancial companies listed on the Nigerian stock exchange. The study uses the general method of moments (GMM) to control for endogeneity concerns.FindingsThe results reveal that, without the moderating effect of overlapping directorship and financial reporting quality, the relationship between regulatory changes and audit fees is positive but weak, which suggests that regulatory changes drive cost. Similarly, the interaction of overlapping directorship did not reverse the positive relationship, which suggests the perceived risk associated with overlapping directorship. However, the improvement in financial reporting quality reverses the relationship, as evidenced by the negative and significant coefficient on the interacted terms.Practical implicationsThis study provides useful insights about committee membership overlap to regulatory authorities concerning the weakness of the monitoring ability of such committees.Originality/valueThe results of this study contribute to the growing literature on regulatory reform, audit fees and corporate governance. Specifically, the study provides empirical evidence on the effect of committee overlap on audit fees, which, to the best of the researchers' knowledge, has received no empirical attention in the Nigerian context.

Sign in / Sign up

Export Citation Format

Share Document