Investigating the Effect of Institutional Shareholders' Attention Deviation on Stock Price Awareness and Audit Risk with Emphasis on the Role of Corporate Governance of Listed Companies in the Iranian Capital Market

Subject Areas : Role of accounting in capital market efficiency and Informativeness

Hassan Hanzali ¹ , Hossein Jannat Makan ² , Parisa Zulfikari ³

1 -
2 - دانشگاه آزاد اسلامی واحد اهواز
3 - Faculty of Basic Sciences

Received: 2025-06-22 Accepted : 2025-08-09 Published : 2025-09-19

Keywords: Institutional Shareholder Attention Deviation, Stock Price Awareness, Audit Risk, Corporate Governance,

Abstract :

Managers abuse the attention deviation of institutional investors to extract rent from companies and participate in value-destroying investment activities. These managers and officials, through these incorrect and non-transparent strategies, attempt to extract economic and financial rents from companies and actively participate in harmful and destructive investment activities that reduce the real and intrinsic value of companies. Therefore, the main and important goal of this scientific research is to examine and analyze whether the deviation in the focus and attention of institutional and large shareholders affects the increase or decrease in the level of awareness and information of stock prices, as well as the amount and level of audit risk. Therefore, the purpose of the study is to investigate whether the attention deviation of institutional shareholders has an effect on stock price awareness and audit risk with an emphasis on the role of corporate governance? The statistical population of the study was companies listed in the Iranian capital market between 1390 and 1402 with a sample of 120 companies and using logistic regression and generalized least squares to test the hypotheses. The results of the findings showed that there is a significant and inverse relationship between the attention deviation of institutional shareholders and stock price awareness, and a significant and direct relationship with audit risk. Also, other research findings revealed that corporate governance moderates the relationship between institutional shareholder attention deviation and stock price awareness and audit risk

References:

ارباب سلیمانی، عباس؛ نفری، محمود. (1384)." اصول حسابرسی"، تهران، سازمان حسابرسی.
ارواحی، سمانه؛ رجایی زاده هرندی، احسان. (1401). بررسی تأثیر حاکمیت شرکتی و کیفیت حسابرسی داخلی بر کیفیت گزارشگری مالی. نشریه علمی رویکردهای پژوهشی نوین مدیریت و حسابداری، 6 (20)، 39-55.
تقوی، رضا. (1395). تجزیه و تحلیل مثلث تقلب مطابق با مدل ریسک حسابرسی، کنگره بین المللی توانمند سازی جامعه در حوزه مدیریت، اقتصاد، کارآفرینی و مهندسی.
حاجیها، زهره؛ شاکری، عبدالرضا. (1398). حاکمیت شرکتی، افشای مسئولیت اجتماعی و ارزش شرکت محورهای موضوعی : حسابداری مالی و حسابرسی. پژوهش¬های حسابداری مالی و حسابرسی، 11 (44)، 175-192.
حساس یگانه، یحیی. (1385). حاکمیت شرکتی در ایران، حسابرس، 33، 117-134.
حسنی، محمد؛ یونس حمه، بیستون. (1401). تحلیل روابط حق‌الزحمه حسابرسی و ریسک حسابرسی در مواجهه با تجدید ارائه و آشفتگی مالی. پژوهش‌های حسابرسی حرفه‌ای، 2 (6)، 82-111.
دودانگه، احمد. (1384). پایان بازی مدیریت سود، حسابدار، 166، 25-27.
ذبیحیان، علیرضا (1401). "اثر ریسک حسابرسی درک شده بر حق الزحمه حسابرسی: از دیدگاه تئوری نمایندگی"، پایان¬نامه کارشناسی ارشد، موسسه آموزش عالی کار قزوین.
رحماني، علي؛ بشيری منش، نازنين؛ شاهرخي، سيده سمانه. (1391). بررسي اثر انتشار پيش¬بيني سود بر ضریب واکنش سود آینده، دانش‌حسابداری، 3 (10)، 29-50.
سحابي، جيران؛ رضايي، نادر. (1395). ريسك حسابرسي و انواع آن، سومين کنفرانس بين المللي مديريت و اقتصاد، تربت حيدريه: دانشگاه تربيت حيدريه.
کریمی، زهرا؛ نصیرزاده، فرزانه. (1402). افشای مسئولیت اجتماعی، آگاهی بخشی قیمت سهام با تاکید بر نقش حاکمیت شرکتی، قصاوت و تصمیم گیری در حسابداری، 2 (2): 19-42
گرد، عزیز؛ حیدریان چالی، رضا؛ سیدجراحی، حمید (1391). رابطه بین برخی سازوکارهای حاکمیت شرکتی و کیفیت سود محورهای موضوعی : حسابداری مالی و حسابرسی. پژوهش¬های حسابداری مالی و حسابرسی، 15 (4)، 143-164.
موسوی، زهرا. (1389). ارزیابی تاثیر سازوکار نظارتی راهبری شرکتی بر عملکرد شرکت¬های پذیرفته شده در بازار اوراق بهادار تهران، فصلنامه حسابداری مالی، 2 (6)، 141-155.
نوراله زاده، نوروز؛ تشکری، مرتضی؛ اسدی، امیرحسین. (1400). بررسی تأثیر حاکمیت شرکتی بر کیفیت حسابرسی داخلی و تصمیم¬گیری مدیران. چشم انداز حسابداری و مدیریت، 4 (44)، 64-76.
واعظ، سید علی؛ بنابی قدیم، رحیم؛ قلمبر، محمد حسین؛ قناد، علی. (1403). تاثیر انحراف توجه سهامداران نهادی بر قابلیت مقایسه صورت¬های مالی. پژوهش¬های تجربی حسابداری، 14 (1)، 139-164.
ولی¬زاده، اعظم؛ خدایی، مونا. (1400). بررسی رابطه کیفیت عملکرد حسابرسی داخلی و کیفیت حاکمیت شرکتی با عملکرد شرکت، پژوهش¬های حسابداری مالی و حسابرسی، 52 (13)، 1-22.
Abbott, L. J., K. Gunny, and T. Pollard, (2017), The impact of litigation risk on auditor pricing behavior: evidence from reverse mergers, Contemporary Accounting Research .34, 1103–1127.
Abramova, I., Core, J.E., Sutherland, A., (2020). Institutional investor attention and firm disclosure. Account. Rev. 95, 1–21. https://doi.org/10.2308/tar-2018-0494.
Appel, I. R., T. A. Gormley, and D. B. Keim, (2016), Passive investors, not passive owners, Journal of Financial Economics. 121, 111–141.
Arbab Soleimani, Abbas; Nafri, Mahmoud. (2005). Principles of Auditing, Tehran, Auditing Organization. (in persian)
Arvahi, Samaneh; Rajaizadeh Harandi, Ehsan. (2022). "Investigating the Effect of Corporate Governance and Internal Audit Quality on Financial Reporting Quality". Scientific Journal of New Research Approaches in Management and Accounting, 6 (20), 39-55. (in persian)
Barber, B.M., Odean, T., (2008). All that glitters: the effect of attention and news on the buying behavior of individual and institutional investors. Rev. Financ. Stud. 785–818. https://doi.org/10.1093/rfs/hhm079.
Basu, R., S. Pierce, and A. Stephan, (2019), The effect of investor inattention on voluntary disclosure, Working paper (Northwestern University).
Bedard, J. C., and K. M. Johnstone, (2004), Earnings manipulation risk, corporate governance risk, and auditors’ planning and pricing decisions, The Accounting Review. 79, 277–304.
Bell, T. B., W. R. Landsman, and D. A. Shackelford, (2001), Auditors’ perceived business risk and audit fees: analysis and evidence, Journal of Accounting Research. 39, 35–43.
Boehmer, E., Kelley, E.K., (2009). Institutional investors and the informational efficiency of prices. Rev. Financ. Stud. 22, 3563–3594. https://doi.org/10.1093/rfs/ hhp028
Cassell, C. A., M. S. Drake, and T. A. Dyer, (2018), Auditor litigation risk and the number of institutional investors, Auditing: A Journal of Practice and Theory. 37,71–90.
Chen, Q., T. Hemmer, and Y. Zhang. (2007). On the relation between conservatism in accounting standards and incentives for earnings management. Journal of Accounting Research. 45 (3) (Jun): 541.
Chen, T; & Chengyuan Qu, J. (2021). Distracted Investors under Institutional Cross-Blockholding: Evidence from Corporate Social Responsibility, Nanyang Business School Research. Paper No. 21-24.
Cheng, C.S.A. Johnston, J. & Li, S. (2014). Higher ERC or Higher Future ERC from Income Smoothness? The Role of Information Environment. American Accounting Assiciation Annual Meeting and Conference on Teaching and Learning in Accounting, Atlanta, GA, August 2-6.
Cheung, A.W.K., Hasan, M.M., Khoo, J., (2021). Distracted institutional shareholders and corporate cash holdings. Int. Rev. Econ. Financ. 71, 453–466. https://doi.org/ 10.1016/j.iref.2020.08.018.
Davydov, D., Peltom¨aki, J., (2023). Investor attention and the use of leverage[J]. Financ. Rev. 58 (2), 287–313.
Dodangeh, Ahmad. (2005). "The End Game of Earnings Management", Accountant, 166, 25-27. (in persian)
Donohoe, M. P., and W. R. Knechel, (2014), Does corporate tax aggressiveness influence audit pricing? Contemporary Accounting Research. 31, 284–308.
Ettredge, M. L., C. Li, and L. Sun, (2006), The impact of SOX Section 404 internal control quality assessment on audit delay in the SOX era, Auditing: A Journal of Practice and Theory. 25, 1–23
Garel, A., J. M. Martin-Flores, A. Petit-Romec, & A. Scott, (2021), Institutional investor distraction and earnings management. Journal of Corporate Finance, 66(2), 1-22.
Hasas Yeganeh, Yahya. (2006). "Corporate Governance in Iran", Auditor, 33, 117-134. (in persian)
Hassani, M. and Yunes Hama, B. (2022). Analysis the relationship between Audit Fees & Audit Risk considering Restatement and Financial Distress. Professional Auditing Research, 2(6), 82-111. doi: 10.22034/jpar.2022.548146.1075. (in persian)
Haw, I.M. Hu, B. J. Lee, J.& Wu, H. (2012). Investor protection and price informativeness about future earnings: International evidence. Review of Accounting Studies, 17(2), 389-419.
Hirshleifer, D., Lim, S.S., Teoh, S.H., (2009). Driven to distraction: extraneous events and underreaction to earnings news. J. Financ. 64, 2289–2325. https://doi.org/ 10.1111/j.1540-6261.2009.01501. x.
Karimi, Zahra; Nasirzadeh, Farzaneh. (2023). "Disclosure of social responsibility, awareness of stock prices with emphasis on the role of corporate governance", Accounting and Decision Making, 2 (2): 19-42. (in persian)
Kempf, E., Manconi, A., & Spalt, O. (2017). Distracted shareholders and corporate actions. The Review Financial Studies, 30(5), 1660–1695
Liu, C., Low, A., Masulis, R.W., & Zhang, L. (2020). Monitoring the monitor: distracted institutional investors and board governance. The Review of Financial Studies, 33(10), 4489–4531.
Maug, E., (1998), Large shareholders as monitors: is there a trade-off between liquidity and control? The Journal of Finance. 53, 65–98
Mousavi, Zahra. (2010). “Evaluating the Impact of Corporate Governance Supervisory Mechanism on the Performance of Companies Listed in Tehran Stock Exchange”, Financial Accounting Quarterly, 2 (6), 141-155. (in persian)
Nouralehzadeh, Nowruz; Takshori, Morteza; Asadi, Amirhossein. (2021). "Investigating the Effect of Corporate Governance on Internal Audit Quality and Managerial Decision Making". Accounting and Management Perspectives, 4 (44), 64-76. (in persian)
Peng, L., and W. Xiong, (2006), Investor attention, overconfidence and category learning, Journal of Financial Economics. 80, 563–602.
Rahmani, A., Bashiri Manesh, N. and Shahrokhi, S. S. (2012). Effects of Management Earnings Forecasts on Future earnings response coefficient. Journal of Accounting Knowledge, 3(10), 29-50. doi: 10.22103/jak.2012.443. (in persian)
Sahabi, Jiran; Rezaei, Nader. (2016). "Audit Risk and Its Types, Third International Conference on Management and Economics", Torbat Heydariyeh: Heydariyeh University of Education. (in persian)
Schmidt, D., (2019). Distracted institutional investors. J. Financ. Econ. 54, 2453–2491. https://doi.org/10.1017/S0022109018001242.
Shleifer, A., and R. W. Vishny, (1986), Large shareholders and corporate control, Journal of Political Economy. 94, 461–488.
Taghavi, Reza. (2016). "Analysis of the Fraud Triangle According to the Audit Risk Model", International Congress on Community Empowerment in the Field of Management, Economics, Entrepreneurship and Engineering. (in persian)
Vaez, Seyed Ali; Bonabi Ghadim, Rahim; Qalambar, Mohammad Hossein; Qanad, Ali. (2024). "The Effect of Institutional Shareholders' Attention Deviation on the Comparability of Financial Statements". Empirical Accounting Research, 14 (1), 139-164. (in persian)
Valizadeh, Azam; Khodai, Mona. (2017). “Investigating the relationship between the quality of internal audit performance and the quality of corporate governance with company performance”, Financial Accounting and Auditing Research, 52 (13), 1-22. (in persian)
Xiang, C., Chen, F., Wang, Q., (2020). Institutional investor inattention and stock price crash risk. Financ. Res. Lett. 33, 101184 https://doi.org/10.1016/j. frl.2019.05.002
Zabihian, Alireza (2014). "The Effect of Perceived Audit Risk on Audit Fees: From the Perspective of Agency Theory", Master's Thesis, Qazvin Institute of Higher Labor Education. (in persian)