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.
Aboody, D., Hughes, J., and Liu, J. (2005).Earnings quality, insider trading, and cost of capital.Journal of Accounting Research. 43, 651–673.
Baker, M., Stein, J., and Wurgler, J. (2003). When does the market matter? Stock prices and the investment of equity-dependent firms.Quarterly Journal of Economics.118, 969–1005.
Biddle et al. (2009). How does financial reporting quality relate to investment efficiency? Journal of Accounting and Economic. 48, 112–131.
Biddle, G., and Hilary, G. (2006).Accounting quality and firm-level capital investment.The Accounting Review. 81, 963–982.
Bolo, Gh., and Hassani, S. A. (2007). Earnings management and its measurement: a theoretical approach. Iranian Association of Certified Public Accountants.4 (12), 72-88.
Bushman, R., and Smith, A. (2001).Financial accounting information and corporate governance.Journal of Accounting and Economics. 31, 237–333.
Buzby, S. L. (1974). Nature of Adequate Disclosure.Journal of Accountancy.38-47.
Chow, C. W., and Wong-Boren, A. (1987).Voluntary Financial Disclosure by Mexican Corporations.The Accounting Review. 62(3), 533-541.
Cooke, T. E. (1989). Disclosure in the Corporate Annual Report of Swedish Companies.Accounting and Business Research. 19, 113-122.
FengChen et al. (2010). Financial Reporting Quality and Investment Efficiency of Private Firms in Emerging Markets.School of Management University of Toronto, 1-54.
Frost, C. A., and Pownall, G. (1994).Accounting Disclosure Practices in the United States and United Kingdom.Journal of Accounting Research. 32(1), 75-98.
HassasYegane, Y. (2006). The impact of culture on corporate governance system.Iranian Association of Certified Public Accountants.172, 19-21.
Hossain, M., Tan, L. M., and Adams, M. B. (1994). Voluntary Disclosure in an Emerging Capital Market: Some Empirical Evidence from Companies Listed on the Kula Lumpur Stock Exchange. The International Journal of Accounting. 29(3), 334-351.
Jensen, M. (1986). Agency costs of free cash flow, corporate finance, and takeovers. American Economic Review. 76, 323–329.
Kordestani, Gh. (2004). Investigating and explaining the relationship between earnings quality and market reaction towards changes in cash dividends. Journal of the Accounting and Auditing Review.37, 51-78.
Lang, M., and Lundholm, R. (1993).Cross-Sectional Determinants of Analysts Ratings of Corporate Disclosure.Journal of Accounting Research. 31(2), 246-271.
McNally, G. M., Eng, L. H., and Hasseldine, C. R. (1982). Corporate Financial Reporting in New Zealand: An Analysis of User Preference, Corporate Characteristics and Disclosure Practices for Discretionary Information. Accounting and Business Research. 13, 11-20.
Mc Nichols, M. (2002). Discussion of the quality of accruals and earnings: the role of accrual estimation errors. The Accounting Review, 77, 61–69.
Mc Nichols, M., and Stubben, S. (2008). Does earnings management affect firms’ investment decisions? The Accounting Review, 83, 1571–1603.
Naser, K., and Nuseibeh, R. (2003). Quality of Financial Reporting: Evidence from the Listed Saudi Non-financial Companies. The International Journal of Accounting, 38, 41-69.
Noravesh, I. (1998). The relation between financial reporting quality and the number of trained accountants in listed firms in Tehran Stock Exchange.Journal of the Accounting and Auditing Review. 7 (1), 34-48.
Saghafi, A., and Malekian, A. (1998). Comprehensiveness of annual reports and financial characteristics of firms listed in Tehran Stock Exchange. Journal of the Accounting and Auditing Review.22, 23, 35-47.
Sajjadi et al. (2009).Non-financial characteristics affecting financial reporting quality of listed firms in Tehran Stock Exchange.Journal of the Accounting and Auditing Review. 16 (57), 51-68.
Stiglitz, J., Weiss, A. (1981). Credit rationing in markets with imperfect information.American Economic Review, 71, 393–410.
Wallace, R. S. O., Naser, K., and Mora, A. (1994).The Relationship between the Comprehensiveness of Corporate Annual Reports and Firm Characteristics in Spain.Accounting and Business Research, 25(97), 41-53.
ZarifFard, A. (2008). Identification and analysis of factors related to earnings quality assessment of Iran's economic firms. Unpublished Ph.D thesis.Tehran University.
Copyright: © 2014 The Author(s)
Published by Human Resource Management Academic Research Society (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode
