Extended Abstract Investigation of Interactive Effect Accounting Information Quality and Information Asymmetry on Inefficient Investment Tehran Stock Exchange (TSE)

 
Journal of Accounting Advances (J.A.A)
Vol. 7, No. 1, 2015, Ser. 68/3
 
 
Extended Abstract
 
Investigation of Interactive Effect Accounting Information Quality and Information Asymmetry on Inefficient Investment
Tehran Stock Exchange (TSE)
 
Dr. Mohammad H. Setayesh       M. Mohammadian       Z. Mehtari
Shiraz University
 
Introduction
Over and underinvestment has led to low investment efficiency and increased economic overheating and inflation severely damaging the interests of the shareholders and the sound development of macro economy, and has been a mainstream topic in the field of modern corporate finance research. This paper aims to investigate the interactive effect of accounting information quality and information asymmetry on inefficient investment. The main purpose of this study is to inform managers, investors, professional accounting bodies, standard-settings and stock exchange about the accounting information quality as a key factor to reduce information asymmetries and enhancing the efficiency of investment.
 
Research Hypotheses
To achieve the purpose of this study, six research hypotheses are chosen. These hypotheses are as follows:

There is a significant and positive relationship between information asymmetry and overinvestment at corporate level.
There is a significant and positive relationship between information asymmetry and underinvestment at corporate level.
There is a significant and negative relationship between accounting information quality and overinvestment at corporate level.
There is a significant and positive relationship between accounting information quality and underinvestment at corporate level.
There is a significant and negative relationship between accounting information quality and information asymmetry with overinvestment.
There is a significant and positive relationship between accounting information quality and information asymmetry with underinvestment.

 
Research Method
Statistical population of this study consists of the companies accepted in Tehran Stock Exchange. The study period is between the years 2001 to 2012. Research method is exploring and determining the relationship between dependent and independent variables. Post event inquiry researches have been used (using historical information). For statistical analysis and to test hypotheses, descriptive statistics (mean and standard deviation) and inferential statistics (correlation-test, single and multiple linear regression and analysis of variance) are used.
 
Results
The results reveal that there has been a significant and positive correlation between information asymmetry and underinvestment. There has also been a significant and negative (positive) correlation between accounting information quality and over (under) investment. Another result reveals that there has been a significant and positive correlation between accounting information quality and information asymmetry with underinvestment; but there has not been a significant and negative correlation between accounting information quality and information asymmetry with overinvestment.
 
Discussion and Conclusion
According to the results, we find that the accounting information quality reduces overinvestment and underinvestment in corporate level and information asymmetry is the key factor for underinvestment. Therefore, increasing accounting information quality will result in investment efficiency.