Ownership Concentration and Accuracy of Financial Reporting

Abstract

This study aims to examine the effect of some variables of corporate governance on the accuracy of financial reporting and audit reports quality of companies accepted in Tehran Stock Exchange from 2007 to 2012. Corporate governance variables used in this study are the concentration of ownership and institutional investors. The ratio of the absolute value of annual adjustments to net income is used to calculate accuracy of financial reporting and number of conditional clauses of the audit report is used to calculate the quality of the audit report. The results show that the concentration of ownership has a positive and significant relationship with the accuracy of financial reporting and the negative relationship with institutional investors and significant financial reporting accuracy. On the other hand, the concentration of ownership has a significant and positive correlation with the quality of the audit report and no significant relationship has been observed between the quality of the audit report and institutional investors.