The impact of investor sentiment on stock prices according to the level of corporate transparency

In the present study seeks to answer the question whether the level of corporate transparency (measured by a battery of proxies including accrual-based earnings management, audit opinions , the quality of audit firms, state ownership and the prevalence of related party transaction) on optimism and pessimism investors than the stock prices, which usually occur due to difficulties in valuation firms effective or not? To highlight the importance of corporate transparency in decision investors, we tested five hypotheses. For this purpose, monthly data of 70 companies listed on the Tehran Stock Exchange during the period from 1388 to 1393 through the analysis of time series have analyzed. The findings of this study suggest the first, second, fourth and fifth hypothesis based on more the effects of investor sentiment, or in companies with management of accruals more, unqualified audit reporting, related party transactions more and State-controlled companies respectively, than firms with lower accruals management, qualified audit reporting, related party transactions less and controlled by private companies. Also with regard to the third hypothesis was not confirmed ,the findings show that investor sentiment effect on stock prices in companies audited by the National Audit Office to audit firms by other institutions not meaningful. Overall, our findings highlight the importance of corporate transparency in mitigating the effects of investor sentiment on stock prices.