Social Responsibility, Corporate Governance and Lack of Financial Reporting Transparency In Tehran Stock Exchange

Abstract

Transparency helps create market confidence and supports economic sustainability. The concept of social responsibility is quite close to the concept of sustainable development. The consequence of the sustainable development approach is special attention to the concept of disclosure and reporting of corporate social responsibility. The growing interest in disclosing corporate accountability reflects an increasing demand for transparency. Therefore, social responsibility and corporate governance are expected to play an effective role in reducing opacity in Financial Reporting. This study examines the moderating effect of corporate governance quality on the relation between corporate social responsibility and opacity in financial reporting. The sample consists of 114 firms listed in Tehran Stock Exchange during the years 2014 to 2019. Results show that social responsibility reduces the opacity in financial reporting and corporate governance reduces the severity of this negative relation.

Keywords

• opacity in financial reporting
• corporate social responsibility
• corporate governance quality