Investigating the factors affecting the quality of disclosure with an emphasis on reliability and timeliness in the Tehran Stock Exchange

Abstract:

One ??of the sources of information for investors, creditors and other users of company information is financial information provided by management. Financial statements are one of the main sources of information for companies that make the market transparent.        

Given the importance of the transparency of companies' information in the capital market, the present research seeks to investigate the factors affecting the quality of disclosure. In this regard, the effect of company size, type of audit firm, institutional ownership, profitability, and amount of debt on the quality of information disclosure of companies has been tested. In this research, multiple linear regression has been used for all information. Spearman's correlation coefficient has also been used to rank the factors affecting the disclosure quality. All hypotheses have been carried out on 259 sample members.

The research results show that, at the 95% confidence level, there is a negative and significant relationship between company size and company debt volume with disclosure quality, and there is no significant relationship between the type of audit firm, institutional ownership, and company profitability with corporate disclosure quality.

Key words: disclosure quality, company size, ownership Institutional, profitability ratio, debt ratio

Introduction and statement of the problem

The basis for decision-making by participants in the securities markets is the information that is published by stock exchanges, issuers of securities admitted to the stock exchange and intermediaries active in these markets, the use of this information and in other words Correct decision-making in the securities market is possible when the said information is timely, relevant, important, and complete and understandable.

If the disclosed information does not have the above features or some of them, without a doubt, the price discovery mechanism in the market will not function properly and the pricing of securities will not be done in a favorable manner. The fairness of the market will be questioned.

Therefore, in order to make the market transparent, provide market participants with the same access to information, and generally create a transparent and fair market for securities trading, the institutions supervising the securities markets have formulated numerous laws, regulations, regulations and instructions. In these rules and regulations, each of the market institutions, i.e. the stock exchange, issuers of accepted bonds, and market intermediaries are obliged to disclose certain information about their affairs and activities. (Salehabadi, 1386, 1)

The importance of access to information for making logical and correct decisions is so much that in democratic societies, the transparency of information and the possibility of access to it are considered as human rights. The greater the sharing of information in societies, the more the possibility of making informed decisions and the accountability of the private and public sectors on how to study and consume resources, and the possibility of the growth of corruption decreases.

One ??of the requirements of healthy competition is the access of all market participants to transparent information.

One ??of the important markets active in the private sector is the capital market, which transparent information strongly affects its performance. The lack of information increases the cost of transactions and the inability of the market to optimally allocate resources. Information, which is an integral part of the decision-making process, the clearer and more accessible it is, can lead to more correct decisions in the field of optimal allocation of resources, which ultimately leads to the achievement of allocation efficiency, which is the ultimate goal of the capital market.

One ??of the important results from the improvement of the financial sector is the increase in the transparency of information that can be provided by companies. Transparency is also essential for the growth and development of societies. In addition to the above mentioned about the importance of transparency, this feature ensures that the benefits of wealth creation are distributed fairly throughout the market and are not only available to a few participants.Laws and regulations generally ensure that information is available to everyone, but "accessibility" to information is one of the important aspects of achieving transparency. Companies can facilitate the flow of access to information.

According to the signaling theory, if companies refuse to provide information about their performance, the market interprets such action as "bad" news and reduces the stock price of that company. Therefore, companies have enough motivation to release information. On the other hand, if the delay in providing information or limiting access to useful information has financial interests, companies will have an incentive to hide information, and according to Wish Vanath and Kaufman, "access" to information is held as a hostage to gain financial interests. In such a situation, there is a need for timely and fair dissemination of information in a way that is available to everyone. arises (Tajveidi, 2016, 2)

One ??can mention the size of the company, the type of auditing firm, the type of ownership, the amount of profitability and also the amount of debt. In this dissertation, the intention is to know the existence of the relationship and also the type of relationship between the aforementioned cases and the quality of disclosure. Finally, we will be able to determine the factors affecting the quality of disclosure from among the mentioned cases and use them to improve the disclosure of companies.

On the other hand, since improving the quality of corporate disclosure reduces information asymmetry and has an important effect on the usefulness of reported information, in this research, the effect or lack of effect of company size, type of audit firm, type of ownership, profitability and also the amount of debt on the quality of disclosure will be investigated. (Norush, 88)

The capital market as a place to collect small funds and direct them towards investment, as well as a tool for securities trading, is associated with many subtleties and sensitivities that significantly affect its performance. This market, which can be considered as a symbol of modern economy, is called efficient and optimal if it has a lot of liquidity and capital funds can be moved in a fluid manner in this market. This, in turn, increases the sensitivity of this economic institution and increases the risk of its activity, especially in the absence of transparency and optimal information, which will be associated with the spread of rumors and false information. In this way, information transparency and capital market participants' access to accurate and timely news and information is one of the most important requirements of an efficient capital market, and requires the design of optimal mechanisms and effective supervision of capital market officials and stakeholders.

According to the above topics, in this research, it has been tried to determine the factors influencing the quality of corporate disclosure (timely and reliable information), which is one of the important factors for the users of corporate financial reports to adopt Investment decisions in the capital market should be investigated and researched.