Assessment of Effect of Corporate Governance Attitudes on Financial Information’s Quality of the Firms Listed in Tehran Stock Exchange

Document Type : Research Paper



     In this study, we investigate the effect of corporate governance attitudes on financial information quality in the firms listed in Tehran Stock Exchange during 2001 to 2010. To calculate corporate governance, we used seven governance attributes including ownership concentration, institutional ownership, dominance of chief executive officer, duality task of chief executive officer, board size, board independence, and chief executive officer tenure. To calculate the quality of financial information, we used the FASB Statement of Financial Accounting Concepts No. 8 for measuring the latent variable. 125 firms are selected as sample. Sample data was analyzed by structural equation modeling and Partial-least-squares (PLS) software.
     Our findings show that ownership concentration, chief executive officer dominance, board independence, chief executive officer tenure have positive and significant effects on the quality of firms' financial information. On the other hand, we have not found meaningful relationship between any of four variables of institutional ownership, duality task of chief executive officer and board size and the variable representing firms’ quality of financial information.