quality of accounting information and stock price adjustment

Authors

Abstract

In this study, we examined the relationship between the quality of accounting information with a delay of stock price adjustment based on a new approach. Due to the theoretical literature, the stock price adjustment was measured by Hou and Moskowitz (2005) model. Independent variables measured in three groups include, Earnings quality indicator variables, misrepresented financial statements indicator variables and accounting variables driving risk. Hypothesis research was tested with data over the period 1380 to 1390. The sample covers 93 listed companies Tehran Stock Exchange and 1023 firm-year observations. This research present evidence that poor accounting quality is associated with delayed price adjustment to information. So that, the poor accruals quality can lead to a 3% increase delay.

Keywords


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