Document Type : Research Paper
Authors
1
Assistant Professor, Faculty of Management and Accounting, Payame Noor University, Tehran, Iran
2
Assistant Professor, Department of Accounting,, Zanjan branch, Islamic Azad University, Zanjan, Iran
3
Instructor, Faculty of Management and Accounting, Payame Noor University, Tehran, Iran
4
MSc, Faculty of Management and Accounting, Payame Noor University, Tehran, Iran
10.22059/ijms.2024.358492.675812
Abstract
TThe present study aims to investigate the impact of companies’ business strategies on financial reporting quality by considering the effect of managers' overconfidence. The data of 140 listed companies on the Tehran Stock Exchange for ten years, from 2013 to 2022, was collected, and hypotheses were tested using multivariate linear regression. The results revealed the type of company's chosen strategy significantly affects the quality of financial reporting. Companies that pursue aggressive strategies have better financial reporting quality than conservative companies, which aligns with previous research results. Birampie (2021) showed companies’ operating policies significantly impact financial reporting. The results also revealed that management overconfidence has a significant adverse effect on financial reporting quality; it reduces the significant impact of business strategy on the quality of financial reporting. In companies with overconfident managers, the significant impact of business strategy on the financial reporting quality is decreased. The findings provide valuable insight into the importance of the selective business strategy on companies' financial reporting quality, which needs to be considered by professional authorities to strengthen the quality of financial reporting.
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