Investigation of the Relationship between Ownership and the Quality of Earnings in Tehran Stock Exchange

Abstract

In this study the relation between ownership structure and earnings quality of firms listed in Tehran Stock Exchange is investigated. In the other words, the influence of institutional ownership, concentrated institutional ownership and manager's ownership on earning quality is examined. Because the earning quality is a multidimensional concept, to measure it in this study, we used qualitative characteristics of accounting information based on Iranian Accounting Standards Board's conceptual framework. Research hypothesis is examined by regression model analysis in 80-86. The results of the study show that the higher institutional ownership is, the better earnings quality motivation for smoothing would be. In other words institutional investors in ownership structure increase reporting of faithful, more relevant, neutral and on time information. Also ownership concentration is less in firms having high quality earnings. By the hand ownership concentration is negatively associated with Representational faithfulness, predictive value and neutrality and is not associated with timeliness. Managers' ownership is negatively related with predictive value and positively associated with timeliness and is not related with Representational faithfulness and neutrality of accounting information.

Keywords

• institutional investors
• ownership concentration
• earnings quality