The Qualitative Effect of Risk Disclosure Components on Information Asymmetry, Regarding To the Moderating Variables, Firm-Riskiness, Economic Downturn and Institutional Analysts in Tehran Stock Exchange

Document Type : Research Paper

Authors

1 Assisstant Professor in Accounting Department in Urmia University

2 Associate Prof., Faculty of Economics & Management, Urmia University, Iran

3 MSc. Student in Financial Management, Faculty of Economics & Management, Urmia University, Iran

Abstract

The purpose of this study is to investigate the relationship between the quality of company's risk disclosure with information asymmetry under Firm-Riskiness, economic downturn and institutional Analysts in Tehran Stock Exchange To achieve this aim 100 firms were evaluated over the period of 2009-2014.To test the research hypothesis, random data pattern is used. The analysis of risk information disclosure in this study have been investigated by content analysis of the various sections of board of directors Performance Report. The role of the present study is based on the standard which was introduced by Linsley and Shrives (2006). The results of current study show that there is a significant negative relationship between quality of risk disclosure and information asymmetry (bid-ask spread and volume of transactions). Also level of firm-riskiness regarding to level of technology and existence of institutional Analysts in volume of transactions case had a significant impact on the relationship between quality of risk disclosure and information asymmetry. But in Tehran Stock Exchange, risk information disclosure in different Economic conditions has a same impact on information asymmetry.

Keywords

References

Abrahamson, E. & Amir, E. (1996). The information content of the president’s letter to shareholders. Journal of Business Finance & Accounting, 23(8), 1157–1182.
Ahmadpour, A. & Ajam, M. (2010). The relationship between Quality of accruals and information asymmetry the companies listed in the Tehran Stock Exchange. Journal of Securities Exchange, 3(11), 107-124. (in Persian)
Ajinkya, B., Bhojras, S. & Sengupta. (2005). The Association between Outside Directors, Institutional Investors and the Properties of Management Earnings Forecasts. Journal of Accounting Research, 43(3), 343-376.
Akhgar, M. & Shanazari, N. (2015). The relationship between the quality of financial reporting and information asymmetry regarding to differnt firm riskiness and investment interest. Journal of Financial Accounting Knowledge, 2(2), 147-199. (in Persian)
Amran, A., Manaf Rosli Bin, A. & Haat, B. (2008). Risk reporting: An exploratory study on risk management disclosure in Malaysian annual reports. Managerial Auditing Journal, 24(1), 39–57.
Beattie, V., McInnes, B. & Fearnley, S. (2004). A methodology for analysing and eval-uating narratives in annual reports: A comprehensive descriptive profile and metrics for disclosure quality attributes. Accounting Forum, 28(3), 205–236.
Beretta, S., & Bozzolan, S. (2004). A framework for the analysis of firm risk communication. The International Journal of Accounting, 39(3), 265–288.
Botosan, C. (2004). Discussion of a framework for the analysis of risk communication. The International Journal of Accounting, 39(3), 289-295.
Brown, S.&Hillegeist, S. (2007). How disclosure quality affects the levelof information asymmetry. Review of Accounting Syudies, 12(3), 443-477.
Chang, S., Lin, R., Chang, F. & Chen, R. (2007). Achieving manufacturing flexibility through entrepreneurial orientation. Industrial Management & Data Systems, 107(7), 997-1017.
Cormier, D., Magnan, M. & Van Velthoven, B. (2005). Environmental disclosure quality in large German companies: economic incentives, public pressures or institutional conditions. European Accounting Review, 14(1), 3–39.
Diamond, A., Prevor, M., Callender, G. & Druin, D. (1997). Prefrontal cortex cognitive deficits in children treated early and continuously for PKU. Monographs of the Society for Research in Child Development, 62(4), 252-279.
Ghalibaf Asl, H. & Naderi, M. (2008). Investigating of overact by investor in Tehran Stock Exchange to the information and reports in Economic Downturn and boon.Journal of financial Research,8(21), (in Persian)
Iatridis, G. (2011). Accounting disclosures, accounting quality and conditional and unconditional conservatism. International Review of Financial Analysis, 20(2), 88-102.
Kajuter, P. & Winkler, C. (2014). Die Risikoberichterstattung der DAX100- Unternehmen im Zeitvergleich. Zeitschriftfürinternationale und kapitalmarktori-entierte. Rechnungslegung, 3(5), 217–228.
Kajüter, P. (2001). Risikoberichterstattung: Empirische Befunde und der Entwurf des DRS 5. Der Betrieb, 54(3), 105–111.
Karami, G. & Sedighi, F. (2015). The level of disclosure, and it’s determinative factors, emphasizing of Islamic based mechanisms and strategies. Journal of Financial Research, 17(40), 357-376. (in Persian)
Khajavi, N. & Alizadeh, V. (2014). The Effects of voluntary disclosure on information asymmetry of listed companies in Tehran Stock Exchange. Journal of Empirical studies of Financial Accounting, 11(42), 89-115.
(in Persian)
Linsley, P. & Shrives, P. (2006). Risk reporting: A study of risk disclosures in the annual reports of UK companies. The British Accounting Review, 38(4), 387-404.
Miihkinen, A. (2013). The usefulness of firm risk disclosures under different firm riskiness, investor-interest, and market conditions: New evidence from Finland. Advances in International Accounting, 29(2), 312-331.
Parker, G. Parsaeian, A. (2008). The management and dimensions of risk, the definition and using in financial organization. Journal of financial research, 2(5), 125-144. ( in Persian)
Petersen, C. V. & Plenborg, T. (2006). Voluntary disclosure and information asymmetry in Denmark. Journal of International Accounting,Auditing and Taxation, 15(2), 127-149.    
Pourzamani, Z., Jahanshad, A. & Mahmoudabadi, A. (2012). The impact of intellectual capital on market value and financial performance. The Iranian Accounting and Auditing Review, 19(68), 17-30. (in Persian)
Rodriguez Domínguez, L. & Noguera Gámez, L. C. (2014). Corporate reporting on risks: Evidence from Spanish companies. Revista de Contabilidad, 17(2), 116-129.
Setayesh, H. & Kashanipour, F. (2012). Investigating the impact of the effective factors on capital structure of listed companies in Tehran stock exchange. Journal of financial research, 12(30), 57-74. (in Persian)
Financial Research Journal
Volume 18, Issue 3
March 2016
Pages 391-414

Files

Share

How to cite

Statistics