The Relationship Between CEO Characteristics, Accounting Opacity, and Synchronicity Stock Prices in the Iranian Capital Market

Authors

https://doi.org/10.22105/aaa.v1i4.48

Abstract

The objective was to explain the relationship between accounting uncertainties and stock price coincidence with the moderating role of CEO characteristics in companies listed on the Tehran Stock Exchange. This research was applied in terms of purpose and descriptive-correlational in nature and method. The study's statistical population was the companies listed on the stock exchange during the nine years from 2012 to 2020, where a total of 113 companies and 1017 observations were studied. The results showed that earnings management and CEO expertise in high and low growth levels do not significantly affect stock price concurrency. Tax aggressiveness and CEO tenure do not considerably affect stock price synchronicity at low growth levels. Still, they significantly affect stock price synchronicity at high growth levels. CEO expertise has no moderating role in the relationship between earnings management and stock price synchronicity at high and low growth levels. Still, CEO expertise has a moderating role on the relationship between tax aggressiveness and stock price synchronicity. CEO tenure has no moderating role on the relationship between earnings management and stock price synchronicity. CEO tenure has no moderating role on the relationship between tax aggressiveness and stock price synchronicity at low growth levels, but it does at high growth levels.

Keywords:

Accounting opacity, Stock price concurrency, CEO characteristics

References

  1. [1] Roll, R. (1988). The stochastic dependence of security price changes and transaction volumes: Implications for the mixture‐of‐distributions hypothesis. The journal of finance, 43(3), 541–566. https://doi.org/10.1111/j.1540-6261.1988.tb04591.x
  2. [2] Hutton, A. P., Marcus, A. J., & Tehranian, H. (2009). Opaque financial reports, R2, and crash risk. Journal of financial economics, 94(1), 67–86. https://doi.org/10.1016/j.jfineco.2008.10.003
  3. [3] Haggard, K. S., Martin, X., & Pereira, R. (2008). Does voluntary disclosure improve stock price informativeness? Financial management, 37(4), 747–768. https://doi.org/10.1111/j.1755-053X.2008.00033.x
  4. [4] Crawford, S. S., Roulstone, D. T., & So, E. C. (2012). Analyst initiations of coverage and stock return synchronicity. The accounting review, 87(5), 1527–1553. https://doi.org/10.2308/accr-50186
  5. [5] Foroughi, D., & Ghasemzad, P. (2015). The effect of comparability of financial statements on the simultaneity of stock prices. Financial accounting research, 8(1), 39-54. (In Persian). https://www.sid.ir/paper/155075/fa
  6. [6] Cheng, C. A., Johnston, J., & Zhou, L. (2011). Accruals quality and price synchronicity–industry-specific and firm-specific information. 2011 American accounting association annual meeting. https://scholars.cityu.edu.hk/en/publications/publication(fda8dad1-3b77-4e73-a345-c028e831787e).html
  7. [7] Talebi, B., & Bahri Sales, J. (2017). Examining the relationship between the components of management accounting system, ambiguity, lack of concentration and performance of managers of production companies in Bonab city. Management accounting, 11(36), 15–30. (In Persian). https://www.sid.ir/paper/198975/fa
  8. [8] Neifar, S., & Ajili, H. (2019). CEO characteristics, accounting opacity and stock price synchronicity: Empirical evidence from German listed firms. Journal of corporate accounting & finance, 30(2), 29–43. https://doi.org/10.1002/jcaf.22386
  9. [9] Arlinghaus, B. P. (1998). Goal setting and performance measures. Tax executive, 50, 434. https://heinonline.org/hol-cgi-bin/get_pdf.cgi?handle=hein.journals/taxexe50&section=143
  10. [10] Setayesh, M. H., Sarvestani, A., & Seyedi, S. J. (2014). Investigating the effects of board size and independence on tax aggressiveness. Applied research in financial reporting, 3(1), 7–28. (In Persian). https://www.arfr.ir/article_50602_en.html?lang=fa
  11. [11] Aljifri, K. (2007). Measurement and motivations of earnings management: a critical perspective. Journal of accounting, business & management, 14. https://openurl.ebsco.com
  12. [12] Baghoomian, R., Rajabdorri, H., & Khoramin, M. (2017). Studying the relationship of personality factors and learning in accounting students. Empirical studies in financial accounting, 14(55), 125–143. (In Persian). https://doi.org/10.22054/qjma.2017.23726.1638
  13. [13] Karkhaneh, M., & Shahverdiani, S. (2015). Evaluation of uncertainty and the absence of focus on management accounting systems in the areas of electricity distribution company in Tehran. Journal of management accounting and auditing knowledge, 4(1394), 125-132. (In Persian). https://www.jmaak.ir/article_7742_999016246d7561c282719570e8e22469.pdf?lang=en
  14. [14] Dadashi, I., Yahyazadefar, M., & Shamekhi, A. (2019). The impact of manager optimism on prices synchronization in TSE. Journal of accounting advances, 10(2), 167–192. (In Persian). https://jaa.shirazu.ac.ir/article_4989_en.html?lang=fa
  15. [15] HashemiFaizabadi, S. M., & Faizabadi, A. (2020). The relationship between controlling shareholders and stock price synchronization in Iran Stock Exchange. The european physical journal special topics, 1(21), 19–34. (In Persian). https://ensani.ir/fa/article/421696
  16. [16] Pourheidari, O., & Forughi, A. (2019). Effect of management influence on disclosure quality of accounting information. Empirical studies in financial accounting, 16(61), 27-53. IN. (In Persian). https://doi.org/10.22054/qjma.2019.38013.1928
  17. [17] Kothari, S. P., Leone, A. J., & Wasley, C. E. (2005). Performance matched discretionary accrual measures. Journal of accounting and economics, 39(1), 163–197. https://doi.org/10.1016/j.jacceco.2004.11.002
  18. [18] Chen, S., Chen, X., Cheng, Q., & Shevlin, T. (2010). Are family firms more tax aggressive than non-family firms? Journal of financial economics, 95(1), 41–61. https://doi.org/10.1016/j.jfineco.2009.02.003
  19. [19] Huang, H. W., Rose-Green, E., & Lee, C. C. (2012). CEO age and financial reporting quality. Accounting horizons, 26(4), 725–740. https://doi.org/10.2308/acch-50268

Published

2024-12-27

Issue

Vol. 1 No. 4 (2024): Accounting and Auditing with Applications

Section

Articles

License

Copyright (c) 2025 Accounting and Auditing with Applications

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

How to Cite

Partouvi, S. . (2024). The Relationship Between CEO Characteristics, Accounting Opacity, and Synchronicity Stock Prices in the Iranian Capital Market. Accounting and Auditing With Applications , 1(4), 174-186. https://doi.org/10.22105/aaa.v1i4.48