The Relationship between Financial Reporting Quality and Corporate Performance: Evidence from Iran

The relationship between financial reporting quality and corporate performance in the imperfect Iranian market is very important for investors, such that one of the main concerns of shareholders is to be informed about corporate performance. On the other hand, information is provided to stakeholders through financial reports and facilitates investment decisions. The aim of this study is to evaluate the effects of financial reporting quality on corporate performance in Iran where this relationship between financial reporting quality criteria and corporate performance has not been investigated yet. In order to test these relationships, ۸۰ listed companies on the Tehran Stock Exchange during the period ۲۰۰۶ - ۲۰۱۴ were studied and analyzed. In this study, three separate methods (contingent income, accrual items, and accruals quality of working capital) and a composite method used to evaluate the quality of financial reporting and in order to calculate the corporate performance, we used the economic and market value added. The results show that the improvement of reporting quality increases the economic value added according to Dechow and Dichev (۲۰۰۲) models. No relationship found between different criteria of financial reporting quality and the market value added. The aim of this study is to evaluate the effects of financial reporting quality oncorporate performance in Iran. To test hypotheses, data of all listed companies on the Tehran Stock Exchange were analyzed during a period from ۲۰۰۸-۲۰۱۶. In this study, three separate methods (contingent income, accrual items, accruals quality of working capital) used to evaluate the quality of financial reporting and in order to calculate corporate performance, we used the economic and market value added.The results show that the improvement of reporting quality increases the economic value added according to Dechow and Dichev(۲۰۰۲) models. No relationship found between different criteria of financial reporting quality and the market value added.

کلیدواژه ها:

Financial reporting quality ، corporate performance ، Tehran Stock Exchange