Abstract

The information asymmetry, as one of the observed phenomena in capital market, has prompted many researchers to look for its causes. The purpose of this research is to examine the effect of earnings comparability and it’s components including the cash flows and accruals on information asymmetry in Tehran Stock Exchange (TSE). The statistical sample of study which has been selected by systematic election comprised of 85 firms listed in TSE during 2002-2015. The method of this study is descriptive- correlation. Multivariate regression and pooled data have been used for testing research hypotheses. The findings show that earnings comparability had no effect on information asymmetry. Similarly, the other results suggest that cash flows comparability and accruals comparability have no effect on information asymmetry. It seems that earnings comparability is not important for investors’ decision making and another factor determine participants’ behavior in Iran capital market. Therefore, it is necessary to provide the reporting to facilitate earnings comparing and the other hand, educating the capital market participants to understand the importance of earnings comparability and use it.