Disclosure Quality and Management Bonus

This paper studies management bonus and disclosure quality, using historical data of firms listed in the Tehran Stock Exchange during the period from 2010 to 2014. The empirical evidence from other countries shows a significant positive correlation between management bonus and disclosure quality. To test the hypotheses the multivariate regression with panel data is used. The results of the first hypothesis test suggest that there is a significant negative relation between the cash bonus payment and disclosure quality. The results of the second hypothesis test suggest that there is a significant negative relation between non-cash bonus payment and disclosure quality too. The findings of the research hypotheses confirm moral hazard hypothesis of possibility for mismanagement to get more bonus.