Studying the Effect of Corporation’s Disclosure Quality Rank on Income-Smoothing and Informativeness of Tehran Stock Exchange’s Listed Companies

Iranian Journal of Finance (2017) Vol. 1, Iss. 3

20 Pages Posted: 9 May 2019

See all articles by Heidar Foroughnejad

Heidar Foroughnejad

Securities and Exchange Organization

Shahin Ahmadi

Sepehr Saderat Investment Company

Amin Sadat

Islamic Azad University (IAU) - Department of Management

Date Written: March 17, 2019

Abstract

The study is to review the disclosure quality rank on income-smoothing and informativeness by means of four hypotheses. The timescale is between 2010 and 2016, and 149 TSE’s listed companies are studied. The first hypothesis examines the effect of higher disclosure quality rank on income informativeness. The result confirms that higher rank of disclosure quality improves income informativeness. The second hypothesis reviews the relationship between disclosure quality rank and income smoothing. The findings of this hypothesis indicate lower disclosure quality will increase income smoothing behavior. In the third hypothesis, the effect of income smoothing on informativeness is examined, which results in a statistical view that income smoothing has a sensible positive effect on informativeness. Finally, the effect of higher rank of disclosure quality on the informativeness of the smoothing listed companies in the fourth hypothesis. The findings indicate that income smoothing has a meaningful effect in strong disclosure quality companies.

Keywords: income informativeness, income smoothing, disclosure quality

JEL Classification: G19, G29, G39

Suggested Citation

Foroughnejad, Heidar and Ahmadi, Shahin and Sadat, Amin, Studying the Effect of Corporation’s Disclosure Quality Rank on Income-Smoothing and Informativeness of Tehran Stock Exchange’s Listed Companies (March 17, 2019). Iranian Journal of Finance (2017) Vol. 1, Iss. 3, Available at SSRN: https://ssrn.com/abstract=3354024

Heidar Foroughnejad

Securities and Exchange Organization ( email )

15 Mollasadra Avenue
Vanak Square
Tehran
Iran

Shahin Ahmadi (Contact Author)

Sepehr Saderat Investment Company ( email )

kave boulevard
Tehran, tehran
Iran

HOME PAGE: http://sepehrsaderat.com

Amin Sadat

Islamic Azad University (IAU) - Department of Management ( email )

Qazvin
Iran

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