Document Type : Research Paper
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Abstract
Political Hypotheses (Political Costs) and Financial Reporting Quality: Empirical Evidence from Tehran Stock Exchange
Abstract
Using structural equation modeling approach, this research aims to explore the effect of political costs on financial reporting quality. For this purpose, 66 publicly listed firms from Tehran Stock Exchange for the period 2006 to 2014 are selected as final data set. As an independent variable, the observable variables such as capital intensity, concentrate rate, tax ratio, firm size, employee intensity and risk are used to proxy the political cost. In addition, quality of accruals, disclosure quality, earnings persistence and accuracy of financial information are used to measure financial reporting quality which is depend variable and growth opportunities and leverage are considered as control variables. The results indicate that political costs have a negative and meaningful effect on financial reporting quality.
Keywords: Political Hypotheses, Political Costs, Financial Reporting Quality, Structural Equation Modeling Approach.
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