The Relation between the Quality of Accounting Information Disclosure and Stock Return Volatility

This paper investigates the relation between disclosures quality and Stock return volatility in firms listed in Tehran Stock Exchange. To measure the disclosures quality, the paper uses firms rating by Security and Exchange Organization regarding the disclosures quality and to test the hypothesis it uses the linear regression. The sample consists of 80 firms listed in Tehran Stock Exchange during years2006 to 2011. The resultsshow that there is a significant and negative relation between disclosures quality and stock return volatility, but according to the adjusted coefficient of determination of three models and statistic Z Kramer, we can say that the negative relation is more intensive in the portfolio of firms with higher than the average disclosure score.