Relationship between Accounting Information Transparency and Corporate Cash Holdings

Subject Areas : Management Accounting

محمدحسین قائمی ¹ (ندارد)
سید مصطفی علوی ² (ندارد)

Received: 2012-01-08 Accepted : 2012-03-10 Published : 2012-06-09

Keywords: Earnings Transparency, information asymmetry, Cash,

Abstract :

Cash which reported in balance sheet is an important asset for companies, becausereceiving attention from others such as investors and creditors. Excess or enough cashholdings are affected by manager’s decisions to avoid from information asymmetryrisk. Transparent disclosure in public financial information which is included infinancial statements will be effective to decrease information asymmetry betweenowners and managers. Information asymmetry leads to increase risk premium andexpected returns. We investigate the effect of information transparency whichmeasuring by earnings transparency on cash holdings in Tehran Stock Exchange overthe period from 1383 to 1389(Iranian calendar). Results show that there is asignificant negative and relation between information transparency and cash holdings