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The Relationship between Financial Reporting Quality and Investment Efficiency in Tehran Stock Exchange

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  • Seyed Moosa Mohammadi

Abstract

One of the objectives of financial reporting is to facilitate the efficient allocation of capital in the economy. One of most important aspects of this fact is to improve the investment decisions. Also, increase in the financial transparency can be considered as a useful factor to reduce investment inefficiency. Many factors influence the quality of financial reporting. Also, many factors can have an impact on financial reporting. Several studies have tried to investigate the link between the financial reporting quality and financial and non-financial variables of firms. The main approach of this research was to investigate the relationship between financial reporting quality and investment efficiency and the factors affecting the firms listed in Tehran Stock Exchange from 2009 to 2012. Results of statistical analyses on 93 firms in Tehran Stock Exchange showed that the financial reporting quality had a significant positive correlation with the investment efficiency. Furthermore, it was found that there was a direct link between firm size and growth opportunities with investment efficiency. Finally, it was found that there was no correlation between cash holdings and tangibility of assets with investment efficiency.

Suggested Citation

  • Seyed Moosa Mohammadi, 2014. "The Relationship between Financial Reporting Quality and Investment Efficiency in Tehran Stock Exchange," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 4(6), pages 104-113, June.
    • Handle: RePEc:hur:ijarbs:v:4:y:2014:i:6:p:104-113
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    References listed on IDEAS

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    Cited by:

    1. Alsuhaibani, Waleed & Houmes, Robert & Wang, Daphne, 2023. "The evolution of financial reporting quality for companies listed on the Tadawul Stock Exchange in Saudi Arabia: New emerging markets' evidence," Emerging Markets Review, Elsevier, vol. 55(C).
    2. Rieke Pernamasari, 2019. "Analysis of Index Internet Financial Reporting: Studies in Banking Companies in Indonesia, Malaysia and Singapore," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 9(1), pages 150-159, January.

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