Univrsity Of Tehran Press Accounting and Auditing Review 2645-8020 25 4 2018 12 22 Investigating the Effect of Withholding Strategy of Bad News on Shareholders’ Satisfaction Investigating the Effect of Withholding Strategy of Bad News on Shareholders’ Satisfaction 519 536 70215 10.22059/acctgrev.2019.260229.1007918 FA Seyed Reza Seyed Nezhad Fahim Ph.D. Candidate, Department of Accounting, Faculty of Accounting and Management, Rasht Branch, Islamic Azad University, Rasht, Iran 0000-0003-3166-323X Mehdi Meshki Associate Prof., Department of Accounting, Payame Noor University, Rasht, Iran. Ebrahim Chirani Assistant Prof., Department of Business Management, Rasht branch, Islamic Azad University, Rasht, Iran Gholamreza Mahfoozi Assistant Prof., Department of Management, Faculty of Literature and Human Sciences, University of Guilan, Rasht, Iran Journal Article 2018 06 14 Objective: According to the prospectus of Iran's Capital Market, this market can be turned into an Islamic finance center in the Middle East. This requires to protect investors’ right through organizing, maintaining and developing a transparent, fair and efficient market for a variety of different types of securities. Transparency and reduction of asymmetry reduce risk in the capital market and increase investor attraction to this market. For this purpose, present research investigates the information asymmetry generated by companies bad news withholding and its role in shareholders’ satisfaction. Methods: In this research, abnormal stock return rate before and after the general meeting date has been used to examine the Information Asymmetry. Trading value and open trading days have also been used as indicators to measure the shareholders’ satisfaction. To achieve the research goal, 123 companies listed in the Tehran Stock Exchange during the period from 2011 to 2016 were selected and a panel data approach was used to test the research of hypotheses. Results: Findings do not show a significant relationship between withholding strategy of bad news and the trading value, but there is a significant negative relationship between the withholding strategy of bad news and the open trading days. Conclusion: Therefore, it is predicted that due to the use of this strategy by the companies, stockholders satisfaction level decreased and in the long run, it causes serious damage to the interests of all involved groups. Objective: According to the prospectus of Iran's Capital Market, this market can be turned into an Islamic finance center in the Middle East. This requires to protect investors’ right through organizing, maintaining and developing a transparent, fair and efficient market for a variety of different types of securities. Transparency and reduction of asymmetry reduce risk in the capital market and increase investor attraction to this market. For this purpose, present research investigates the information asymmetry generated by companies bad news withholding and its role in shareholders’ satisfaction. Methods: In this research, abnormal stock return rate before and after the general meeting date has been used to examine the Information Asymmetry. Trading value and open trading days have also been used as indicators to measure the shareholders’ satisfaction. To achieve the research goal, 123 companies listed in the Tehran Stock Exchange during the period from 2011 to 2016 were selected and a panel data approach was used to test the research of hypotheses. Results: Findings do not show a significant relationship between withholding strategy of bad news and the trading value, but there is a significant negative relationship between the withholding strategy of bad news and the open trading days. Conclusion: Therefore, it is predicted that due to the use of this strategy by the companies, stockholders satisfaction level decreased and in the long run, it causes serious damage to the interests of all involved groups.

https://acctgrev.ut.ac.ir/article_70215_31ca7eeff06e55d93bcf26baf02fe181.pdf