Examining the impact of accruals quality and information relevance on the agency costs of the companies listed in Tehran Stock Exchange

The purpose of this research is to study the effects of the accruals quality and the information relevance on the agency costs for the companies listed in Tehran Stock Exchange (TSE). Hence, an attempt will be made to answer the following question: “Is there a significant relationship between the accruals quality and the information relevance and agency costs?”. To find the answer, this research utilizes the operating expenses to sales ratios, asset turnover ratios, and Q-tobin’s ratios were employed as proxies for the agency costs. The statistical population of the study consists of 67 companies of the TSE during 2003 to 2010; and the multivariate regression is used. The results suggest that there is a reverse relationship between accruals quality, accruals quality that is adjusted according to performance and information relevance, and the agency costs criteria (i.e., operating expenses to sales ratios, asset turnover ratios, and Q-tobin’s ratios).