Accounting and Auditing Research

Accounting and Auditing Research

A Study of the Effect of Corporate Governance Score on the Relation between Fundamental Variable of Accounting and Stock Return in Companies Listed on the Tehran Stock Exchange

Document Type : Original Article

Authors
Giti Azam Shahverdi 1
Nafiseh Ashena 2
1 Instructor of Arshad Damavand Higher Education Institute, Iran
2 M.A. of Accounting at Arshad Damavand Higher Education Institute, Iran
Abstract
One of the main purposes of accounting is to provide information for use in investment decisions. The discovery of the value of financial information is one of the most important pillars of empirical studies in the field of finance and accounting knowledge. The analysis and study of financial information are conducted in two general categories of correlative and predicting studies. In the first method, based on the acceptance of market efficiency hypothesis, the stock price is considered as one of the main criteria of the value of institutions. According to this approach, the existence of statistical correlation between accounting data and stock price or return means that accounting information summarizes efficient events and information on stock prices. Therefore, it can contain a value close to the market value. In this study, the effect of corporate governance on the relation between the fundamental variable of accounting and stock return over the period 2007-2014 has been studied. The results of the first hypothesis suggesting the role of corporate governance in adjusting the relation between fundamental analyses and stock return, are accepted.
Keywords
Corporate Governance
Fundamental Variable of Accounting
Stock Return
Accounting and Auditing Research
Volume 11, Issue 41
Spring 2019
Pages 147-162