The Effect of External Corporate Governance Mechanism on the Stock Price Crash Risk with Emphasis on Financial Reporting Quality and Auditor Expertise in the Industry

Objective: The main purpose of this study is to examine the effect of external corporate governance mechanism on stock price crash risk in firms listed on the Tehran Stock Exchange, with emphasis on financial reporting quality and auditor industry expertise. Methods: Data in the research was collect...

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Autores principales:	Mahnaz Eslamdoost, Rostam Ranjbar Navi, Hassan Chenari
Formato:	article
Lenguaje:	FA
Publicado:	University of Tehran 2021
Materias:	corporate governance stock price crash risk financial reporting quality auditor expertise Accounting. Bookkeeping HF5601-5689 Finance HG1-9999
Acceso en línea:	https://doaj.org/article/9b9d41846d9e413f9c6034ecc3bff3a5
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spelling	oai:doaj.org-article:9b9d41846d9e413f9c6034ecc3bff3a52021-11-14T05:28:15ZThe Effect of External Corporate Governance Mechanism on the Stock Price Crash Risk with Emphasis on Financial Reporting Quality and Auditor Expertise in the Industry2645-80202645-803910.22059/acctgrev.2021.308398.1008421https://doaj.org/article/9b9d41846d9e413f9c6034ecc3bff3a52021-08-01T00:00:00Zhttps://acctgrev.ut.ac.ir/article_83004_f231415739c6fa97d88a19dace32bf18.pdfhttps://doaj.org/toc/2645-8020https://doaj.org/toc/2645-8039Objective: The main purpose of this study is to examine the effect of external corporate governance mechanism on stock price crash risk in firms listed on the Tehran Stock Exchange, with emphasis on financial reporting quality and auditor industry expertise. Methods: Data in the research was collected from financial reports disclosed by 110 firms in the time period of 2008 to 2017. Multivariate regression with panel data was used to test the hypotheses. For the purpose of the research, the measures of the period of stock price crash, negative skewness in stock returns, down-to-up volatility, and maximum sigma were used for stock price crash risk. Results: The findings obtained from the research indicate that the effect of institutional ownership on stock price crash risk (the measures of negative skewness in stock returns, down-to-up volatility and maximum sigma) is inverse and significant. Also, the moderating role of financial reporting quality in the inverse effect of institutional ownership on stock price crash risk is direct. Conclusion: In recent years, the presence of institutional investors among board members has become increasingly important as one of external mechanisms affecting the corporate governance system. These stakeholders have motivation needed to control and change managers’ performance, and their active oversight can limit managers’ behavior.Mahnaz EslamdoostRostam Ranjbar NaviHassan Chenari University of Tehranarticlecorporate governancestock price crash riskfinancial reporting qualityauditor expertiseAccounting. BookkeepingHF5601-5689FinanceHG1-9999FAبررسی‌های حسابداری و حسابرسی, Vol 28, Iss 2, Pp 226-247 (2021)
institution	DOAJ
collection	DOAJ
language	FA
topic	corporate governance stock price crash risk financial reporting quality auditor expertise Accounting. Bookkeeping HF5601-5689 Finance HG1-9999
spellingShingle	corporate governance stock price crash risk financial reporting quality auditor expertise Accounting. Bookkeeping HF5601-5689 Finance HG1-9999 Mahnaz Eslamdoost Rostam Ranjbar Navi Hassan Chenari The Effect of External Corporate Governance Mechanism on the Stock Price Crash Risk with Emphasis on Financial Reporting Quality and Auditor Expertise in the Industry
description	Objective: The main purpose of this study is to examine the effect of external corporate governance mechanism on stock price crash risk in firms listed on the Tehran Stock Exchange, with emphasis on financial reporting quality and auditor industry expertise. Methods: Data in the research was collected from financial reports disclosed by 110 firms in the time period of 2008 to 2017. Multivariate regression with panel data was used to test the hypotheses. For the purpose of the research, the measures of the period of stock price crash, negative skewness in stock returns, down-to-up volatility, and maximum sigma were used for stock price crash risk. Results: The findings obtained from the research indicate that the effect of institutional ownership on stock price crash risk (the measures of negative skewness in stock returns, down-to-up volatility and maximum sigma) is inverse and significant. Also, the moderating role of financial reporting quality in the inverse effect of institutional ownership on stock price crash risk is direct. Conclusion: In recent years, the presence of institutional investors among board members has become increasingly important as one of external mechanisms affecting the corporate governance system. These stakeholders have motivation needed to control and change managers’ performance, and their active oversight can limit managers’ behavior.
format	article
author	Mahnaz Eslamdoost Rostam Ranjbar Navi Hassan Chenari
author_facet	Mahnaz Eslamdoost Rostam Ranjbar Navi Hassan Chenari
author_sort	Mahnaz Eslamdoost
title	The Effect of External Corporate Governance Mechanism on the Stock Price Crash Risk with Emphasis on Financial Reporting Quality and Auditor Expertise in the Industry
title_short	The Effect of External Corporate Governance Mechanism on the Stock Price Crash Risk with Emphasis on Financial Reporting Quality and Auditor Expertise in the Industry
title_full	The Effect of External Corporate Governance Mechanism on the Stock Price Crash Risk with Emphasis on Financial Reporting Quality and Auditor Expertise in the Industry
title_fullStr	The Effect of External Corporate Governance Mechanism on the Stock Price Crash Risk with Emphasis on Financial Reporting Quality and Auditor Expertise in the Industry
title_full_unstemmed	The Effect of External Corporate Governance Mechanism on the Stock Price Crash Risk with Emphasis on Financial Reporting Quality and Auditor Expertise in the Industry
title_sort	effect of external corporate governance mechanism on the stock price crash risk with emphasis on financial reporting quality and auditor expertise in the industry
publisher	University of Tehran
publishDate	2021
url	https://doaj.org/article/9b9d41846d9e413f9c6034ecc3bff3a5
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The Effect of External Corporate Governance Mechanism on the Stock Price Crash Risk with Emphasis on Financial Reporting Quality and Auditor Expertise in the Industry

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