The Impact of Qualitative Features of Financial Reporting on Investment Efficiency and Capital Structure Based on Bank Received Facilities: Looking at Companies with Low Investment and Information Asymmetry

Document Type : Original Article

Authors

1 Corresponding Author: PH.D in Accountancy, Department of Accountancy, Najafabad Branch, Islamic Azad University, Najafabad, Iran

2 MA In Accountancy, Imam Sadegh Nonprofit Higher Education Institute, Isfahan, Iran

Abstract

According to agency theory, when managers have good information about the existence of profitable investment opportunities, they may not pursue it, and this is important because of the ethical risk problems that result from owning the company's cash by management, myopia, and Choosing the wrong plan, as well as the lack of available funds due to foreign financing and facilities received, is costly. Conservatism reduces the problems of incorrect selection and improves the company's investment policies by facilitating access to foreign funds and reducing the cost of these funds. The conservative oversight role helps the board and other corporate governance components, such as institutional ownership, to avoid value-destroying strategies such as the empire of managers. Accordingly, the purpose of this study is the effect of qualitative characteristics of financial reporting on the efficiency of investment and facilities received, looking at companies with low investment and information asymmetry. The statistical population of the present study includes all companies listed on the Tehran Stock Exchange during the period 2014 to 2019. The sample size based on the available statistical population includes 95 companies. Research evidence suggests that among the qualitative features of financial reporting, in low-investment companies, accounting conservatism has a positive and significant effect on investment efficiency. Also, in companies with information inequality, accounting conservatism has no significant effect on investment efficiency and information asymmetry does not affect the relationship between accounting conservatism and investment efficiency, which information inequality, low investment problems Intensifies. Another result of the research is that in low-investment companies, the quality characteristics of financial reporting do not have a significant effect on the facilities received.

Keywords

References

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Budget and Finance Strategic Research
Volume 2, Issue 2 - Serial Number 6
Summer Quarterly
September 2021
Pages 167-203

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History

  • Receive Date: 13 May 2021
  • Revise Date: 16 August 2021
  • Accept Date: 20 October 2021

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