The Valuable Consequences of Financial Reporting Convergence towards Integrated Reporting
This paper analyzed the consequences of financial reporting convergence towards integrated reporting in Iran's capital market focusing on agency cost and cost of equity capital. In order to measure the financial reporting convergence towards integrated reporting, a checklist has been used which...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | fas |
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Allameh Tabataba'i University Press
2023-02-01
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| Series: | مطالعات تجربی حسابداری مالی |
| Subjects: | |
| Online Access: | https://qjma.atu.ac.ir/article_15507_bc3ccd0d248f1f14ba48d8e8bd9d320f.pdf |
| _version_ | 1797378256875290624 |
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| author | Hassan Badri Gamchi Mohammad Hassani Ahmad Yaghoobnezhad Ehsan Rahmaninia |
| author_facet | Hassan Badri Gamchi Mohammad Hassani Ahmad Yaghoobnezhad Ehsan Rahmaninia |
| author_sort | Hassan Badri Gamchi |
| collection | DOAJ |
| description | This paper analyzed the consequences of financial reporting convergence towards integrated reporting in Iran's capital market focusing on agency cost and cost of equity capital. In order to measure the financial reporting convergence towards integrated reporting, a checklist has been used which designed based on the international integrated reporting framework. The agency cost measured using the efficiency criterion based on the ratio of operational expenses to operational revenues. The cost of equity capital estimated based on the expected rate of return using the capital assets pricing model. The research population includes 144 firms listed in the Tehran Securities & Exchange over March 2016 till March 2021. Multivariable regression models were used to test research hypotheses. The findings showed that increase in convergence level of firms’ financial reporting with integrated reporting framework has reduced agency cost and cost of equity capital. These findings suggested that focusing on the benefits of integrated reporting through transparency and completeness of information disclosure has weakened agency conflicts and reduced agency costs. In addition, integrated reporting has reduced the cost of capital in financing decisions due to the adoption of sustainable business model from integrated thinking and the reduction of information asymmetry due to greater transparency for more informed forecasting. |
| first_indexed | 2024-03-08T20:05:09Z |
| format | Article |
| id | doaj.art-8f426323ec084a9fa5019b98fd38167b |
| institution | Directory Open Access Journal |
| issn | 2821-0166 2538-2519 |
| language | fas |
| last_indexed | 2024-03-08T20:05:09Z |
| publishDate | 2023-02-01 |
| publisher | Allameh Tabataba'i University Press |
| record_format | Article |
| series | مطالعات تجربی حسابداری مالی |
| spelling | doaj.art-8f426323ec084a9fa5019b98fd38167b2023-12-23T10:38:38ZfasAllameh Tabataba'i University Pressمطالعات تجربی حسابداری مالی2821-01662538-25192023-02-0119769713010.22054/qjma.2023.71385.242415507The Valuable Consequences of Financial Reporting Convergence towards Integrated ReportingHassan Badri Gamchi0Mohammad Hassani1Ahmad Yaghoobnezhad2Ehsan Rahmaninia3Ph.d Student, Department of Accounting, Faculty of Management, North Tehran Branch, Islamic Azad University, Tehran, IranAssistant Professor in Accounting, Department of Accounting & Auditing, Faculty of Management, North Tehran Branch, Islamic Azad University, Tehran, IranAssociate Professor, Department of Accounting, Faculty of Economics & Accounting, Central Tehran Branch, Islamic Azad University, Tehran, IranAssistant Professor, Department of Accounting, Faculty of Management, North Tehran Branch, Islamic Azad University, Tehran, IranThis paper analyzed the consequences of financial reporting convergence towards integrated reporting in Iran's capital market focusing on agency cost and cost of equity capital. In order to measure the financial reporting convergence towards integrated reporting, a checklist has been used which designed based on the international integrated reporting framework. The agency cost measured using the efficiency criterion based on the ratio of operational expenses to operational revenues. The cost of equity capital estimated based on the expected rate of return using the capital assets pricing model. The research population includes 144 firms listed in the Tehran Securities & Exchange over March 2016 till March 2021. Multivariable regression models were used to test research hypotheses. The findings showed that increase in convergence level of firms’ financial reporting with integrated reporting framework has reduced agency cost and cost of equity capital. These findings suggested that focusing on the benefits of integrated reporting through transparency and completeness of information disclosure has weakened agency conflicts and reduced agency costs. In addition, integrated reporting has reduced the cost of capital in financing decisions due to the adoption of sustainable business model from integrated thinking and the reduction of information asymmetry due to greater transparency for more informed forecasting.https://qjma.atu.ac.ir/article_15507_bc3ccd0d248f1f14ba48d8e8bd9d320f.pdfintegrated reportingfinancial reportingagency costscost of capital |
| spellingShingle | Hassan Badri Gamchi Mohammad Hassani Ahmad Yaghoobnezhad Ehsan Rahmaninia The Valuable Consequences of Financial Reporting Convergence towards Integrated Reporting مطالعات تجربی حسابداری مالی integrated reporting financial reporting agency costs cost of capital |
| title | The Valuable Consequences of Financial Reporting Convergence towards Integrated Reporting |
| title_full | The Valuable Consequences of Financial Reporting Convergence towards Integrated Reporting |
| title_fullStr | The Valuable Consequences of Financial Reporting Convergence towards Integrated Reporting |
| title_full_unstemmed | The Valuable Consequences of Financial Reporting Convergence towards Integrated Reporting |
| title_short | The Valuable Consequences of Financial Reporting Convergence towards Integrated Reporting |
| title_sort | valuable consequences of financial reporting convergence towards integrated reporting |
| topic | integrated reporting financial reporting agency costs cost of capital |
| url | https://qjma.atu.ac.ir/article_15507_bc3ccd0d248f1f14ba48d8e8bd9d320f.pdf |
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