Competitiveness and Pricing of Accounting Information Asymmetry and Quality

Document Type : Research Paper

Authors

1 PhD of Accounting, University of Tehran, Iran

2 Associate Professor, Faculty Member of Tehran University; Iran

Abstract

In accordance with the risk and return proportion theories and literature, investors rate the risk that they give to accounting information, according to their assessment of the information environment's features. The lower uncertainty and higher reliability of accounting environment they encounter, the lower risk of information they apply. Thus, they require less return and the firm incurs less capital costs. The risk of accounting information is also affected by two factors of information quality and information distribution (information literacy) and the existence of competition for obtaining this information affects these two factors. This research reviews three characteristics of accounting information: information asymmetry, quality and competitiveness, as well as their effects on cost of capital. The results of testing questions show that degree of competitiveness affects the pricing of information asymmetry and quality.

Keywords

References

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History

  • Receive Date: 25 July 2018
  • Revise Date: 03 January 2019
  • Accept Date: 05 January 2019

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