The Role some of Corporate Governance Mechanisms in Reducing the Risk of Share Price crash in Accepted Companies in Tehran Stock Exchange

Document Type : Research Paper

Authors

1 Assistant Professor of Accounting, University of Economic Sciences, Iran

2 Master of Accounting, Science and Research Saveh, the Ayande bank, Iran

3 Master of Accounting, Tarbiat Modarres University, Iran

Abstract

The current study was conducted to investigate the role of corporate governance mechanisms in reducing the risk of share price crash in accepted companies in Tehran stock exchange. To fulfill the purpose of the study, form variable board independence the institutional shareholders, the interior auditor, and the separation of CEO’s duties from those of the CIO were applied as the variables of corporate governance, and 163 companies within 2004-2011 were selected as the sample for the study which totally formed 884 year-company. The analysis of the data showed a meaningful and indirect relationship between institutional shareholders and the risk of share price crash, and a meaningful and direct one between the ratio of board independence and the risk of share price crash. Also, it indicated a direct relationship between the interior auditor and the separation of CEO’s duties from those of the CIO on one hand and the risk of share price fall on the other, but this was not statistically supported. Pedagogically, corporate governance mechanisms affects share price crash.

Keywords

Main Subjects

References

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