The Impact Of the Economic Crisis on the Relationship between the CEO Power on Firm Value and the Financial Performance; The Role of Company’s Financial Reporting Characteristics

Abstract

Considering the fact that economic crisis comes along with uncertainty and fluctuations in macroeconomic variables and it causes in a special situation in the economic circumstance of the country and companies activities in that, therefore it can affect the ability and the power of management on the company’s performance and its value. Also, the quality of auditing and the quality of financial reporting in critical situations can moderate the opportunistic behavior of managers. The purpose of this study was to investigate the effect of economic crisis on the relationship between management power, company value and financial performance considering the moderating effect of the Characteristics of financial reporting on Tehran Stock Exchange companies. In this research, two Characteristics of financial reporting including financial reporting quality and audit quality have been used to investigate ethical characteristics of the company.Accordingly, Using the systematic removal method, the data of 197 listed companies in Tehran Stock Exchange for the years 2006-2017 is analyzed. The results of the study show that the characteristics higher level of audit quality by decreasing the negative impact of the Crisis conditions leads to a positive effect of the power and ability to manage the company's value and financial performance. Also, the characteristics higher level of financial reporting quality, as well as the negative effect of the critical situation, only have a positive effect on the ability and power of management on the value of the company but have no significant effect on the firm's financial performance.

Keywords

• economic crisis"
• "management power"
• "firm value"
• "financial performance"
• "characteristics of financial reporting