The effect of remuneration of directors on the quality of reporting

Document Type : Original Article

Authors

1 Ph.D. candidate. Department of Accounting, Islamic Azad University, Qazvin, Iran

2 Assistant professor, Department of Accounting, Rasht Branch, Islamic Azad University, Rasht, Iran.

3 Associate Professor, Finance, Payame Noor University, Rasht, Iran.

4 Assistant professor, Department of Accounting, Rasht Branch, Islamic Azad University, Rasht, Iran

Abstract

This study aims to investigate the effect of remuneration of directors on the quality of reporting. Financial managers, due to their unique expertise and technical knowledge, affect the company's financial reports more than board managers. In addition to examining this effect, this study also examines the role of two variables, corporate governance and internal control. In order to test the hypotheses of the present study, 167 researcher-made questionnaires were distributed among the financial managers of companies listed on the Tehran Stock Exchange. Confirmation analysis test and structural equations were used to test the research hypotheses. Research findings confirm the effect of remuneration of directors on the quality of reporting. The internal control variable also has a mediating role that strengthens the effect of the main variables of the research. However, the role of corporate governance in this study was not confirmed as a mediating variable. Finally, the results of this study showed that the quality of financial reporting is directly related to the remuneration of directors, which in turn, resolves the concerns of decision makers and policy makers of the company about monitoring and fulfilling loyal commitments to provide quality financial reporting.

Keywords

References

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