A pattern of factors influencing the information transparency and disclosure of listed companies in Tehran Stock Exchange

Abstract

One of the requirements of healthy competition is the access of all market participants to transparent information. In accounting, transparency means the ability of presented information to have visible content. In other words, transparency is increase in timely and reliable economic, social and political information flow available to all stockholders. Despite the development of accounting knowledge, there is a problem of lack of transparency and unsuitable disclosure of information to be presented to users and stockholders all over the world namely Iran. The present study attempted to investigate the major factors effective on information transparency and disclosure (including firm size, ownership structure, ownership concentration, non-executive board of managers, financial managers ethics and organizational culture). In this study, structural equation modeling method based on partial least squares (PLS) is used. This method is more appropriate for models and theories that are in the first stages of development. Also, it is not limited to the large size of the sample and the assumption of normality of the data. The results of this research on 105 companies listed in Tehran Stock Exchange shows that firm size, ownership structure, ownership concentration, non-executive board of managers, ethics of financial managers affect information transparency and disclosure. Among these factors, ownership structure has the most effect, this means that the greater the ownership of the company is private the information transparency and disclosure is greater. The results also show that the larger the company size and the less the ownership concentration is, information transparency and disclosure will be greater. In addition, an increase in the percentage of the non-executive board of managers leads to increase in the information transparency and disclosure. Studies on the ethics of financial managers show that transparency and disclosure of information has a direct relationship with perfectionism.