Investigating the Impact of International Financial Reporting Standards on Accounting Quality in the Tehran Stock Exchange
Keywords:
International Financial Reporting Standards, Reporting quality, financial decision-makingAbstract
This study aims to investigate the impact of adopting International Financial Reporting Standards (IFRS) on the accounting quality of companies listed on the Tehran Stock Exchange (TSE). The research is applied and descriptive, employing a panel data method with a fixed-effects approach. The statistical population comprised all companies listed on the TSE between 2014 and 2022. Using systematic elimination, 118 firms were selected. Data were collected from audited financial statements and official databases such as CODAL, and analyzed using EViews12. Accounting quality was measured by two indicators: changes in net income and the ratio of changes in net income to changes in operating cash flows. Regression analysis results revealed that IFRS adoption has a positive and significant impact on accounting quality. Specifically, a one-unit increase in the IFRS variable corresponded to a 0.19-unit increase in the accounting quality metric (p<0.01). Control variables including auditor quality, financial leverage, firm size, and growth opportunities also showed positive and significant effects. The model’s coefficient of determination (R²=0.79) indicated a high explanatory power. The implementation of IFRS enhances accounting quality and improves financial transparency among TSE-listed firms. These findings suggest that IFRS adoption can increase comparability, reduce earnings management, and strengthen investor protection. Accordingly, regulators and market participants are encouraged to promote and mandate IFRS application in financial reporting.
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Copyright (c) 2025 Yassin Moazami Goudarzi (Corresponding author)
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