The Effect of Auditor Style on the Relationship between Financial Reporting Readability and Stock Price Informativeness

This study aims to investigate the effect of Auditor Style on the Relationship between Financial Reporting Readability and stock price informativeness of listed Companies in the Tehran Stock Exchange.

This research is an applied one in terms of purpose, and is correlation and post-event in terms of method. To test the research hypotheses, 108 companies in the period 2012-2019 were selected and analyzed using multiple regression models. These two dimensions Financial Reporting Readability in our tests: (Fog index and Text length index.

The results showed that the Auditor Style and Financial Reporting Readability (Fog index and Text length index) has a significant positive impact on Stock Price informativeness. Also, the results showed that the Auditor Style has a significant positive impact on the relationship between Financial Reporting Readability and Stock price informativeness.

Auditor Style has increased the Financial Reporting Readability. And due to the effect, it has on increasing the transparency of the reporting environment, it reduces the uncertainty and asymmetry of information about the company's shares. This brings the intrinsic value of the investment closer to the value that investors place on the market for their stocks. The proximity of the real value of the stock and the expected value of the shareholders will eventually lead to an increase in Stock Price informativeness. Blue underlines indicate that Grammarly has spotted an unnecessarily wordy sentence. You'll find suggestions that can help you effortlessly revise a wordy sentence.