The Effect of Business Risk Management on the Relationship between Operational Cash Transparency and Stock Price Crash Risk
الموضوعات :
Farshid Ahmadi Farsani
1
(Assistant Professor, Department of Accounting, Payame Noor University, Tehran, Iran.)
الکلمات المفتاحية: stock price fall risk, lack of transparency of financial information, risk management, operating cash.,
ملخص المقالة :
Purpose: The purpose of this study is to investigate the impact of business risk management on the relationship between the lack of transparency of operating cash and the risk of falling stock prices. Method: In this regard, a sample consisting of 131 companies accepted in the Tehran Stock Exchange during the years 2013-2022 was selected with the help of the systematic elimination model, and finally the research hypothesis was tested with the help of multiple linear regression based on panel data. Findings: The results of the research hypothesis test that there is a positive and significant relationship between the transparency of operating cash and the risk of falling stock prices. Also, the results showed that business risk management has a moderating role on the relationship between the lack of transparency of operating cash and the risk of falling stock prices. Conclusion: The present study provides useful evidence for company managers and capital market agents that by properly managing the risks facing the company and forming a risk committee, it is possible to reduce the risk of falling stock prices while monitoring the transparency of financial information.
Azadi, Keyhan; Azizmohammadlou, H.; Tesadi Kari, M.J.; Khezmatgozar, H. (2021) The effect of financial statements on stock price crash risk and shareholder behavior. Knowledge of Financial Accounting Spring 1400 - Issue 39. pp. 122-144.
Khalifeh Soltani, S.A.; Rahnama, M., Koyasi, F., (2018) The Effect of Political Communication on the Risk of Stock Price Crash under Information Asymmetry Conditions of Audit Knowledge Journal, Vol. 9, No. 4, pp. 11-128. (in Persian).
Rostami, Vahab, Mehravar, M., Kargar, H. (2022) The Effect of Risk Management on the Pace of Adjustment of Financial Leverage in the Life Cycle Stages of Companies, Accounting Advances¬, Shiraz University, Vol. 14, No. (1), pp. 59-88. (in Persian).
Shirbandi, H.; Khaloti, Shakour; Farmani, A.(2023) The Effect of Cash Flow Risk¬Management on Financial Stability. Research in Accounting and Economic Sciences, Vol. (7), No. (1), pp. 91-104.
Fakhari, H.; Hassani, M. (2013) The relationship between operating cash flows, lack of profit transparency and risk of stock price crash. Journal of Applied Research in Financial Reporting, Successive 2. pp. 63.88.
Fakhari, H.; Mohammadi, J.; Hassan Tavajal-kordi, Mohsen (2017) The Effect of Abnormal Operating Cash Flows on Earnings Sustainability in Listed Companies in Tehran Stock Exchange. Journal of Economics and Business. Vol. 8, No. 16, pp. 69-78.
Fakhari, H.; Nasiri, M. (2020) The Impact of Company Performance on the Risk of Future Stock Price Crash. Journal of Financial Management Strategy, Vol. 8, No. 30. pp. 43-62.
Foroughi, D., Amiri, H., Mirzaei, M., (2011) The effect of untransparent financial information on the risk of future stock price crash in companies accepted in the stock exchange. Journal of Financial Accounting Research, 3rd Year, No. 4.
Kamyabi, Y., Shahsavari, M., Salmani, R. (2016) The Effect of Accrual Earnings Management on the Relationship between Real Earnings Management and Capital Expenditure. Accounting and Audit Studies, Tehran University of Management, Vol. 22, No. 1, pp. 19-38
Kordestani, Gholamreza, Rezazadeh, Javad, Mohammadi, Vahid (2018) Investigating the Temporal and Economic Factors Affecting the Relationship between Accruals and Operating Cash Flow. Journal of Empirical Accounting Studies. Volume 15, Issue 60. pp. 33-59.
Shame, Beauty, Goodness , Goodness. (2016) The Relationship between Real Profit Management and Accrual Earnings Management in Firms Suspected of Fraud in Tehran Stock Exchange. Journal of Empirical Studies of Financial Accounting Vol. 12, No. 49, pp. 29-52. (in Persian).
Mehravar, M.; Kargar, H. (2019) The moderating role of financial reporting quality on the relationship between political communication and risk of future stock price decline. 17th Iranian National Accounting Congress. Qom.
Chen, Ch. Kim. J.B. and Yao, L. (2017). “Earnings Smoothing: Does it 13.Exacerbate or Constrain Stock Price Crash Risk?” Journal of Corporate Finance, 42 (C): 36-54
Chen, J. Chan, kam. Dong, Wang. & Zhang, F, (2017), "Internal Control and Stock Price Crash Risk: Evidence from China", European Accounting Review,26 (1), PP. 125-152.
DeFond, M. Hung, M. 2003. An empirical analysis of analysts’ cash flow forecasts. J. Accounting Econ. 356(1), 95-101.
He, G. Ren, H. (2017). Financial constraints and future stock price crashrisk. The Review of Financial Studies, 16: 487- 525.
Hutton, A.P. Marcus, A. J. & Tehranian, H. (2009). Opaque financial reports, R2, and crash risk. Journal of Financial Economics, 94, 67-86.
Kothari, S. P. Shu, S. & Wysocki, P. D. (2009). Do managers withhold bad news? Journal of Accounting Research, 47, 241-27.
Lee, L.F. 2012. Incentives to inflate reported cash from operations using classification and timing. AccountingRev.87(1),1–33.
C. S. Agnes Cheng, S. Li and (2020) Operating cash flow opacity and stock price crash risk, J. Account. Public Policy,https://doi.org/10.1016/j.jaccpubpol.2020.106717
Jat, M.N., Jajja, M.S.S., Shah, S.A.A. and Farooq, S. (2023), "Manufacturer's servitization level and financial performance: the role of risk management", Journal of Manufacturing Technology Management, Vol. 34 No. 1, pp. 122-146. https://doi.org/10.1108/JMTM-12-2021-0503
