Abstract:
The present study aims to investigate the relationship between comparability of financial reports and negative coefficient of skewness of firm-specific monthly returns. In this study, to measure the financial statements comparability, De Franco et al. (2012) model is employed. Sample includes the 425 firm-year observations from companies listed on the Tehran Stock Exchange during the years 2013 to 2017 and research hypothesis was tested using multivariate regression model based on panel data. The results indicate that financial statements comparability mitigates negative skewness of stock return. Our findings are robust to alternative measure of stock price crash risk, individual analysis of the research hypothesis for each year and endogeneity concern. The current study is almost the first study which has been conducted in emerging capital markets, so the findings of the study not only extend the extant theoretical literature concerning the stock price crash risk in developing countries including emerging capital market of Iran, but also help investors, capital market regulators and accounting standard setters to make informed decisions
Machine summary:
Comparability of Financial Reports and Negative Skewness of firm -Specific Monthly Returns: Evidence from Iranian firms Mehdi Safari Gerayli * Department of Accounting, Bandargaz Branch, Islamic Azad University, Bandargaz, Iran.
As such, the focus of the study is to acquire an understanding of whether the financial statement comparability affects the stock price crash risk amongst Iranian public listed firms.
These findings contribute to the debate regarding the role of financial statement comparability in re- ducing the stock price crash risk, and provide valuable insights for managers, investors, capital market regulators and accounting standard-setters.
Following the previous research, we use firm size, leverage, growth opportunities and return on equity (ROE) as control variables that could affect stock price crash risk.
05 levels, respectively The second test sought to explore whether financial statement comparability was associated with stock price crash risk in each individual year of the research period.
Then, moder- ating effect of firm size on the relation between financial statement comparability and stock price crash risk was examined and the results were presented in Table 7.
That is to say that the negative relation between financial statement comparability and stock price crash risk is more pronounced in larger firms.
The results of testing the research hypothesis reveal that financial statement comparability mitigates the negative coefficient of skewness of firm-specific monthly returns.
, [4], who believe a negative association between financial statement comparability and corporate stock price crash risk.