The effect of auditor tenure on the relationship between institutional shareholders and stock price synchronicity

Subject Areas : Journal of Capital Market Analysis

Vahid Zabihollahnejad ¹ , HamidReza GholamniaRoshan ²

1 - Master of Accounting, Babol Branch, Islamic Azad University, Babol, Iran.
2 - Assistant Prof, Faculty of Humanities, Islamic Azad university, Babol, Iran

Received: 2023-02-08 Accepted : 2023-05-26 Published : 2023-05-22

Keywords: Auditor Tenure, institutional shareholders, Stock price synchronicity,

Abstract :

Priceconcurrency is a relative measure of company-specific information compared to market and industryinformation, which is reflected in stockprices, and due to its close connection with economic development and growth and capitalmarketstability.it is a relatively new field in economicresearch.And financial isconsidered and taken into consideration.In this research, the effect of the tenureof the auditor on the relationship between institutionalshareholders and the simultaneityof stockprices has been investigated.The method of this research is descriptive ofcorrelationtype and practical in terms of purpose.The statisticalpopulation ofthis researchconsists of thenumber of companies admitted to the Tehran StockExchange, which were active inthe stockexchange between2015and2019.In order to determine the appropriate samplesize and homogenize the statisticalpopulation, the systematicelimination methodwas used, after applying the relevant criteria, 105companies in the Tehran Stock Exchange were selected as a statistical sample. All analysissteps have been done inEviews10and Stata14.5econometricsoftware with regression test.Thefindings from the first hypothesis of the research show that institutional shareholders do not have a significanteffect on the simultaneity of stockprices.The findings of the secondhypothesis of the researchshow that the tenure of the auditordoes not moderate therelationship betweeninstitutional shareholders and the simultaneity of stockprices.The resultsshow that the increase in the ownership percentageof institutional investorsincreases the institutionalcontrol bythis category of investors in the stockexchange, and the higherthe ownershippercentage of institutionalinvestors in a company, themore the possibility of interference andseizure of the flows.It limits thcash of thecompany forthe managers,which reducesthe specificrisk of the company by themanagers, and as a result, it leads tothe reduction of R2and finally leads to the reduction of the stockprice simultaneity.