Investigate the relationship between the quality of accounting information and corporate governance by investing in the main operations of the company

Subject Areas : Management Accounting

Reza Bagherzadegan ¹ (Graduate Student of Accounting, Damavand Unit, Islamic Azad University, Damavand, Iran)
M. Hamed Khanmohammadi ² (Assistant Professor, Department of Accounting, Damavand Unit, Islamic Azad University, Damavand, Iran.)

Received: 2017-04-11 Accepted : 2018-08-11 Published : 2019-03-21

Keywords: Accounting Information Quality, Comprehensive Quality Index of, Investing in major operations, Corporate Governance,

Abstract :

The existence of a conflict of interests between managers and shareholders causes managers to make decisions that do not provide for the interests of shareholders. One of these decisions may be the lack of investment in the major operations of the companies. One way to prevent it is to increase the quality of financial reporting and the establishment of a corporate governance system, as this will lead to stakeholder monitoring of investment decisions. The main objective of this research is to investigate the effect of corporate governance and the quality of financial information on investment in the main operations of companies admitted to Tehran Stock Exchange. In this study, 119 companies were sampled in a cross-sectional (119 observation). In this research, investing in the main operations of the company through the calculation of the correlation between growth of the industry and the company, as well as the quality of accounting information through the calculation of a comprehensive quality index of profits, which consists of four variables (accruals quality, earnings sustainability, profitability predictability and profit smoothing) Is measured. The results of the research show that there is a positive and significant relationship between the comprehensive index of earnings quality and the amount of investment in the main operations of the company.

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