The Effect of Management Interpretative Report Regulations on the Relationship Between Risk Sentiment of Annual Reports and Stock Liquidity Risk Using the System of Simultaneous Equations.

Subject Areas : Financial engineering

Akram Taftiyan ^{1 *} , Fatemeh mansuri mohammad abadi ² , Akhtar Sadat ouliai ³

1 - Associate Professor, Department of Accounting, Yazd Branch, Islamic Azad University, Yazd, Iran.
2 - Ph. D. Student, Department of Accounting, Yazd Branch, Islamic Azad University, Yazd, Iran.
3 - 2. Ph. D. Student, Department of Accounting, Yazd Branch, Islamic Azad University, Yazd, Iran.

Received: 2024-08-12 Accepted : 2025-02-26 Published : 2025-03-21

Keywords: : Risk Sentiment, Stock Liquidity Risk, Management Interpretive Report, Annual Reports. ,

Abstract :

Risk sentiment affects investors' risk assessment and financial decision-making. Therefore, the present study investigated the two-way relationship between the risk sentiment of annual reports and stock liquidity risk in companies listed on the Tehran Stock Exchange during the period 2009 to 2012. In this study, 131 companies were selected as a sample using the systematic elimination method and the risk sentiment of annual reports was calculated using the content analysis method, and then the system of simultaneous equations was estimated using the two-stage regression method. The estimation results indicate that there is no two-way relationship between the risk sentiment of annual reports and the liquidity ratio of AMIOST and the illiquidity ratio of AMIHOOD in companies listed on the Tehran Stock Exchange. In addition, the development of the management interpretative report regulations has a significant effect on the relationship between the risk sentiment of annual reports and the liquidity ratio of AMIOST and the illiquidity ratio of AMIHOOD.

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