Financial reporting quality and information asymmetry (A case of Iranian firms)

The purpose of this paper is to examine empirically the impact of financial reporting quality on information asymmetry in Iran. Using three different attributes of financial reporting quality including: accruals quality, earnings persistence and earnings predictability, data analysis over a period of five years (2008–2012) revealed that accruals quality is negatively and significantly associated with information asymmetry. We also find that, firms with more earnings predictability have lower level of information asymmetry. However, contrary to expectation, we fail to find a significant association between earnings persistence and Iranian firm’s information asymmetry. These findings have implications for policy makers, managers, investors and researchers in general and those in emerging markets in particular

Financial reporting quality and information asymmetry (A case of Iranian firms)

The purpose of this paper is to examine empirically the impact of financial reporting quality on information asymmetry in Iran. Using three different attributes of financial reporting quality including: accruals quality, earnings persistence and earnings predictability, data analysis over a period of five years (2008–2012) revealed that accruals quality is negatively and significantly associated with information asymmetry. We also find that, firms with more earnings predictability have lower level of information asymmetry. However, contrary to expectation, we fail to find a significant association between earnings persistence and Iranian firm’s information asymmetry. These findings have implications for policy makers, managers, investors and researchers in general and those in emerging markets in particular

Financial reporting quality and information asymmetry (A case of Iranian firms)

The purpose of this paper is to examine empirically the impact of financial reporting quality on information asymmetry in Iran. Using three different attributes of financial reporting quality including: accruals quality, earnings persistence and earnings predictability, data analysis over a period of five years (2008–2012) revealed that accruals quality is negatively and significantly associated with information asymmetry. We also find that, firms with more earnings predictability have lower level of information asymmetry. However, contrary to expectation, we fail to find a significant association between earnings persistence and Iranian firm’s information asymmetry. These findings have implications for policy makers, managers, investors and researchers in general and those in emerging markets in particular

The Valuable Consequences of Financial Reporting Convergence towards Integrated Reporting

This paper analyzed the consequences of financial reporting convergence towards integrated reporting in Iran's capital market focusing on agency cost and cost of equity capital. In order to measure the financial reporting convergence towards integrated reporting, a checklist has been used which designed based on the international integrated reporting framework. The agency cost measured using the efficiency criterion based on the ratio of operational expenses to operational revenues. The cost of equity capital estimated based on the expected rate of return using the capital assets pricing model. The research population includes 144 firms listed in the Tehran Securities & Exchange over March 2016 till March 2021. Multivariable regression models were used to test research hypotheses. The findings showed that increase in convergence level of firms’ financial reporting with integrated reporting framework has reduced agency cost and cost of equity capital. These findings suggested that focusing on the benefits of integrated reporting through transparency and completeness of information disclosure has weakened agency conflicts and reduced agency costs. In addition, integrated reporting has reduced the cost of capital in financing decisions due to the adoption of sustainable business model from integrated thinking and the reduction of information asymmetry due to greater transparency for more informed forecasting