corporate governance role in readability of board of directors' report of companies listed in Tehran Stock Exchange

Subject Areas : Journal of Investment Knowledge

Hosna ghahramani Saghir ¹ , fatemeh sarraf ² , Roya darabi ³

1 - Phd Student, Department of Accounting, South Tehran Branch, Islamic Azad University, Tehran, Iran
2 - Assistant Professor, Department of Accounting, South Tehran Branch, Islamic Azad University, Tehran, Iran
3 - Associate Professor, Department of Accounting, South Tehran Branch, Islamic Azad University, Tehran, Iran.

Received: 2019-07-03 Accepted : 2019-07-08 Published : 2021-09-23

Keywords: Corporate Governance, voluntary disclosures, Tehran Stock Exchange (TSE), Directors’ Report Readability,

Abstract :

The readability and receiving a quick message from a financial report is one of the main features of a report on usefulness of decision-making by users. In this regard, board of directors' report is one of the company's (firm) optional disclosures that plays a significant role in the decision making and reaction (response) of investors. This study has also examined readability of board of directors' report. The purpose of this study is to investigate the effect of strategic factors and corporate governance on the degree of comprehensibility and readability of manager's discretionary disclosures. This study has considered companies listed in Tehran Stock Exchange as the statistical population, sampling method is systematic removal and the sample size is 159 companies during 2013 and 2017. The research method is descriptive-correlational with causal-correlation variables. In order to process and test hypotheses, we have used the multivariate regression method and panel data as well as constant effects model. In the research model test, a significant relationship was found between corporate governance factors other than financial knowledge and readability of board of directors' report, and consequently, the company leadership system's factors were effective on readability of board of directors' report so that with strengthening corporate governance, disclosed information is more readable and the quality of optional disclosure is increased.

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