Developing the Qualitative Model of the Factors Affecting the Accounting Information Quality Pricing in Iran

Document Type : Research Paper


1 Ph.D. Candidate, Department of Accounting, Faculty of Economics and Administrative Sciences, University of Isfahan, Esfahan, Iran.

2 Associate Prof., Department of Accounting, Faculty of Economics and Administrative Sciences, University of Isfahan, Esfahan. Iran.

3 Assistant Prof., Department of Economics, Faculty of Economics and Administrative Sciences, University of Isfahan, Isfahan, Iran


Objective: The aims of this study is to propose an appropriate model for identifying and classifying the factors affecting the pricing of the accounting information quality in Iran, further provide strategies for improving the contribution of the accounting information into the Iranian capital market.
Methods: In this research, thematic analysis method was applied on the data collected through interviews, as research instrument. For this purpose, 17 semi-structured interviews were performed with experts and authorities in the field of the capital market. The research method was validated in the coding, analysis, and modeling stages to ensure the quality of the research results.
Results: A total of 21 factors affecting the quality assessment of financial reports by investors were identified. Moreover, based on the roles of the different constituents of the capital market, some solutions were proposed for improving the state of the accounting information quality pricing in Iran. Finally, the findings were presented in the form of a qualitative model.
Conclusion: In the process of obtaining information for economic decision-making, the contribution of each investor to accounting reports depends on their investment goal, level of financial knowledge, and percentage of. The micro investors who consider long-term horizons for purchasing the stocks based on a relatively good deal of financial knowledge are expected to price the quality of accounting information under the effect of various factors. Mainly four groups of factors were found to affect the pricing of accounting information quality, including the capital market conditions, political and economic circumstances of the country, special characteristics of the entity, and behavioral attitudes of the investors. As the main elements of the capital market, the legislators, financial reporting practitioners, and investors can take steps, as proposed in the form of solutions in this research, toward improving the state of pricing the accounting information quality in Iran


Abdoh Tabrizi, H. (2006). Political Economy Privatization of Financial Institutions. Journal of Economic Process, 16(1), 14-21. (in Persian)
Abeysekera, I. (2003). Political economy of accounting in intellectual capital reporting, The European Journal of Management and Public Policy, 2(1), 65-79.
Aflatooni, A. and A. Bakhtiarvand. (2016). TheEeffect of Financial Reporting Quality and Disclosure Quality on Cost of Capital: Approach to Instrumental Variables. Quarterly Financial Accounting, 31(1), 30-50. (in Persian)
Amirazad, M., Baradaran Hasanzadeh, R., Mohammadi, A. &Taghizadeh, H. (2019). Moleling the Factors Affecting Financial Reporting Quality using Grounded Theory in Iran, Journal of Financial Accounting Research, 4(38), 21-42. (in Persian)
Armstrong, C.S., Core, J.E., Taylor, D. J. and Verrecchia, R.E.  (2011). When does information asymmetry affect the cost of capital? Journal of Accounting Research, 49(1),1–40.
Barth, M.E., Li, K. and McClure, Ch. (2019). Evolution in Value Relevance of Accounting Information. Stanford University Graduate School of Business Research Paper. Working paper No.3512, 17-24.
Behnampour, M., Izadinia, N., Saffari, B. (2019). The Relationship between Accounting Information Quality and Firm Value with an Emphasis on controlling operating volatility. Journal of Financial Management Strategy, 7(7), 65-87. (in Persian)
Biddle, G. C., Hilary, G. and Verdi, R. S. (2009). How does financial reporting quality improve investment efficiency? Journal of Accounting and Economics, 48(2), 112-131.
Blankspoor, E., Dehaan, E., Wertz, J. & Zhu, C. (2019). Why Do Individual Investors Disregard Accounting Information? The Roles of Information Awareness and Acquisition Costs. Journal of Accounting Research, 57(1), 53-84.
Bodie, Z., Kane, A. & Marcus, J. (2009) Investments. Boston, Mass; London: McGraw-Hill.
Caskey, J. A. (2009). Information in equity markets with ambiguity-averse investors. Review of Financial Studies, 22(1), 3595–3627.
Cohen, D. A. (2008). Does information risk really matter? An analysis of the determinants and economic consequences of financial reporting quality. Asia-Pacific Journal of Accounting and Economics, 15(2), 69-90.
Core, J. E., Guay, W. R. & Verdi, R. (2008). Is Accruals Quality a Priced Risk Factor? Journal of Accounting and Economics, 46(1), 2–22.
Cornell, B., Landsman, W. R. &, Stubben, S. (2017). Accounting Information, Investor Sentiment, and Market Pricing. Journal of Law, Finance, and Accounting. 2(2), 325-345.
Easley, D., and O’Hara, M. (2004). Information and the Cost of Capital. The Journal of Finance, 59 (4), 1553-1583.
Easton, P. McAnally, M.L., Sommers, G. & Zhang, X.J. (2018). Financial Statement Analysis & Valuation, 5th Edittion. United States of America: Cambridge Business Publisher.
Ebrahimi, E., Mehrani, K., Nazari, M. (2018). Competitiveness and Pricing of Accounting Information Asymmetry and Quality. Journal of Empirical Research in Accounting, 9(35), 179-202. (in Persian)
Francis, J., LaFond, R., Olsson, P. and Schipper, K. (2005). The market pricing of accruals quality. Journal of Accounting and Economics, 9(2), 295-327.
Ghio, A. & Verona, R. (2020). The Evolution of Corporate Disclosure: Insights on Traditional and Modern Corporate Communication. Cham: Springer International Publishing.
Gray, P., Koh, P.Sh., & Yen, T. H. (2009). Accruals quality, information risk and cost of capital: evidence from Australia. Journal of Business Finance & Accounting, 36(1), 51-72.
Guest, G. Bunce, A. and Johnson, L. (2006). How Many Interviews Are Enough? : An Experiment with Data Saturation and Variability, Field Methods, 18(1), 59-82.
Hariri, N. (2016). Priciples and Methods of Qualitative Research. Azad University Press.
(in Persian)
Karami, G.H. & Tajik, K. (2015). Presenting a Model for Inflation Accounting in Iran. Accounting and Auditing Review, 22(1), 105-124. (in Persian)
Khoufi, N. (2020). Accounting Information Quality and Investment Decisions in the Emerging Markets. Frontiers in Management and Business, 1(1), 16-23.
Kim, D., Qi, Y. (2010). Accruals Quality, Stock Returns, and Macroeconomic Conditions. The Accounting Review, 85(1), 937–978.
Layle, M.R. (2019). Information Quality, Growth Options, and Average Future Stock Returns. Accounting Review, 4(1), 271-298.
Lincoln, Y.S. and Guba, E.G. (1985). Naturalistic Inquiry. Sage.
Mirzaei, KH. (2016). Qualitative Researching, Research, Researching and Writing. Fozhan Press. (in Persian)
Pourheidari, O. & Bagheri, N. (2012). Financial Information Quality on Liquidity Risk and Cost of Equity. Financial management strategy, 1(1), 35-53. (in Persian)
Rasaiian, A. & Hoseini, V. (2008). The Relationship between Accruals Quality and Cost of Capital in Iran. Accounting and Auditing Review, 15(4), 67-82. (in Persian)
Rashidi Baghi, M. (2019). The Role of Audit Quality and the Quality of Accounting Information in Changing the Information Asymmetry Pricing. Journal of Financial Accounting Knowledge, 6(3), 167-187. (in Persian)
Valizadeh Larijani, A. & Behbahaniniya, P.S. (2018). Modeling of Accounting and Nonaccounting Items Affecting Shareholders, Wealth: Prediction and Validation. Journal of Empirical Research in Accounting, 7(4), 181-216. (in Persian)
Veltri, S. & Silvestri, A. (2020). The Value relevance of Corporate Financial and Nonfinancial Information Provided by the Integrated Report: A Systematic Review. Journal of Business Strategy and the Environment, 29(8), 3038-3054.
Westerholm, M. (2011). On the Pricing Effect of Earning Quality. Unpublished Masters Thesis Report, Aalto University, School of Economics. available at
Xing, X. and Yan, Sh. (2019). Accounting information quality and systematic risk. Review of Quantitative Finance and Accounting, 52(1), 85-103.