Role of Accounting Information Quality in Recency Bias in Investors’ Behavior

Document Type : Research Paper

Authors

1 Ph.D Student in Accounting, South Tehran Branch, Islamic Azad University, Tehran, Iran.

2 Associate Professor of Accounting, South Tehran Branch, Islamic Azad University, Tehran, Iran.

3 Assistant Professor of Economics, Central Tehran Branch, Islamic Azad University, Tehran, Iran.

4 Assistant Professor of Accounting, South Tehran Branch, Islamic Azad University, Tehran, Iran.

10.22103/jak.2019.13406.2896

Abstract

Objective: This study examined the presence of the phenomenon of recency and the role of accounting information quality in the recency manifestation, concentrating on capital market mechanism with the use of accounting information.
Method: In this study, earning per share, return on assets, return on equity and book value per share were used as indicators for accounting information. The method of data analysis was inferential. To test the research hypotheses, panel data multiple regression model and data of 148 companies in the Tehran Stock Exchange during 2008-2017 were used.
Results: The findings showed that accounting information quality mitigates the recency phenomenon in investors behavior in the Iranian capital Market.
Conclusion: By improving the quality of accounting information reported by companies, behavioral bias in investing decision making cab be reduced.

Keywords

References

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History

  • Receive Date: 12 January 2019
  • Revise Date: 30 June 2019
  • Accept Date: 04 August 2019

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