An investigate on relationship between moral hazard and corporate governance with earning forecast quality in the Tehran Stock Exchange
Moral hazard and corporate governance are important factors in determining market transparency. The proposed study of this paper investigates the effects of these two factors on earning quality as well as forecasted earning in Tehran Stock Exchange. We have selected some stocks based on some predefi...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Growing Science
2012-09-01
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| Series: | Management Science Letters |
| Subjects: | |
| Online Access: | http://www.growingscience.com/msl/Vol2/msl_2012_254.pdf |
| _version_ | 1811272023782981632 |
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| author | Seyed ahmad Khalifehsultani Fatemeh Rouhi |
| author_facet | Seyed ahmad Khalifehsultani Fatemeh Rouhi |
| author_sort | Seyed ahmad Khalifehsultani |
| collection | DOAJ |
| description | Moral hazard and corporate governance are important factors in determining market transparency. The proposed study of this paper investigates the effects of these two factors on earning quality as well as forecasted earning in Tehran Stock Exchange. We have selected some stocks based on some predefined circumstances and extracted some necessary information over the period of 2005-2010. Based on these criteria, the information of 132 firms are qualified for the proposed study of this paper using 792 years/firm from 23 industries. There are two hypotheses associated with this study. According to the first hypothesis, we investigate whether there is a relationship between board of director independency and quality of forecasted earning. In the second hypothesis, we look to find out whether there is a relationship between the size of board of directors and quality of forecasted earning. We have used three models and using ordinary regression analysis tried to test the models. Based on the results of the survey, we have concluded that moral hazard does not influence forecasted earning, significantly. However, the results of this survey concluded that there is a meaningful relationship between forecasted earning and quality of earning. In terms of members of editorial board, quality of earning has a reverse relationship with absolute deviation of forecasted earning. In other words, as the number of editorial board increases, we may expect a more precise earning estimation. The other observation is that non-board member's duties have better motivation to contribute to firms and could make some changes. |
| first_indexed | 2024-04-12T22:32:45Z |
| format | Article |
| id | doaj.art-55a172ab36754c9c888068a004954762 |
| institution | Directory Open Access Journal |
| issn | 1923-9335 1923-9343 |
| language | English |
| last_indexed | 2024-04-12T22:32:45Z |
| publishDate | 2012-09-01 |
| publisher | Growing Science |
| record_format | Article |
| series | Management Science Letters |
| spelling | doaj.art-55a172ab36754c9c888068a0049547622022-12-22T03:13:56ZengGrowing ScienceManagement Science Letters1923-93351923-93432012-09-012827952802An investigate on relationship between moral hazard and corporate governance with earning forecast quality in the Tehran Stock ExchangeSeyed ahmad KhalifehsultaniFatemeh RouhiMoral hazard and corporate governance are important factors in determining market transparency. The proposed study of this paper investigates the effects of these two factors on earning quality as well as forecasted earning in Tehran Stock Exchange. We have selected some stocks based on some predefined circumstances and extracted some necessary information over the period of 2005-2010. Based on these criteria, the information of 132 firms are qualified for the proposed study of this paper using 792 years/firm from 23 industries. There are two hypotheses associated with this study. According to the first hypothesis, we investigate whether there is a relationship between board of director independency and quality of forecasted earning. In the second hypothesis, we look to find out whether there is a relationship between the size of board of directors and quality of forecasted earning. We have used three models and using ordinary regression analysis tried to test the models. Based on the results of the survey, we have concluded that moral hazard does not influence forecasted earning, significantly. However, the results of this survey concluded that there is a meaningful relationship between forecasted earning and quality of earning. In terms of members of editorial board, quality of earning has a reverse relationship with absolute deviation of forecasted earning. In other words, as the number of editorial board increases, we may expect a more precise earning estimation. The other observation is that non-board member's duties have better motivation to contribute to firms and could make some changes.http://www.growingscience.com/msl/Vol2/msl_2012_254.pdfMoral hazardCorporate governanceTehran Stock ExchangeQuality of earning |
| spellingShingle | Seyed ahmad Khalifehsultani Fatemeh Rouhi An investigate on relationship between moral hazard and corporate governance with earning forecast quality in the Tehran Stock Exchange Management Science Letters Moral hazard Corporate governance Tehran Stock Exchange Quality of earning |
| title | An investigate on relationship between moral hazard and corporate governance with earning forecast quality in the Tehran Stock Exchange |
| title_full | An investigate on relationship between moral hazard and corporate governance with earning forecast quality in the Tehran Stock Exchange |
| title_fullStr | An investigate on relationship between moral hazard and corporate governance with earning forecast quality in the Tehran Stock Exchange |
| title_full_unstemmed | An investigate on relationship between moral hazard and corporate governance with earning forecast quality in the Tehran Stock Exchange |
| title_short | An investigate on relationship between moral hazard and corporate governance with earning forecast quality in the Tehran Stock Exchange |
| title_sort | investigate on relationship between moral hazard and corporate governance with earning forecast quality in the tehran stock exchange |
| topic | Moral hazard Corporate governance Tehran Stock Exchange Quality of earning |
| url | http://www.growingscience.com/msl/Vol2/msl_2012_254.pdf |
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