The Relationship between Financial Reporting Quality and Idiosyncratic Stock Return Volatility Among Companies Listed on Tehran Stock Exchange

• Published in: پژوهش‌های تجربی حسابداری
• Main Authors: AbdolKarim Moghaddam, Mostafa Ahmadinejad, Soltan Javanmardi
• Format: Article
• Language: Persian
• Published: Alzahra University 2012-03-01
• Subjects: Financial Reporting Quality; AccrualsDiscretionary Accruals; Square of Discretionary Accruals
• Online Access: http://jera.alzahra.ac.ir/article_537_cf978af1d027222d115274d070163abf.pdf
• ISSN: 2251-8509; 2538-1520

qualityaffect idiosyncratic stock return volatility among companies listed on Tehran Stock Exchange (TSE). It is assumed that decrease in financial reporting quality increasesthe variance of idiosyncratic stock return in those companies. Data was analyzed pooled, for The aim of this research is to investigate thefinancial reporting 2008-2010. To calculate financial reporting quality, three criteria were employed: decrease in the quality of accruals, discretionary accruals and the square of discretionary accruals, and idiosyncratic stock return volatility was measured by the variance of monthly idiosyncratic stock return.Findings indicate thatearnings smoothing with the total accruals and discretionary accrualsis understood by stock exchanges and contributes to increase in the volatility of idiosyncratic stock return in the companies.