Relationship between Accounting Information Transparency and Corporate Cash Holdings

Cash which reported in balance sheet is an important asset for companies, because receiving attention from others such as investors and creditors. Excess or enough cash holdings are affected by manager’s decisions to avoid from information asymmetry risk. Transparent disclosure in public financial information which is included in financial statements will be effective to decrease information asymmetry between owners and managers. Information asymmetry leads to increase risk premium and expected returns. We investigate the effect of information transparency which measuring by earnings transparency on cash holdings in Tehran Stock Exchange over the period from 1383 to 1389(Iranian calendar). Results show that there is a significant negative and relation between information transparency and cash holdings