Investigating the Concurrent Relationship between Management Optimism Models and Financial Reporting Quality Emphasizing the moderating role of governance system mechanisms: A structural equation approach

The purpose of this study was to investigate the relationship between management optimism models and financial reporting quality with the moderating role of governance mechanisms using the structural equation approach.

Financial data and data of this study were extracted from the financial statements of listed companies in Tehran Stock Exchange between 2011-2017. After applying statistical population constraints, 171 companies were selected to test the hypotheses, and PLS software was used to test the research hypotheses.

The results showed that management optimism has a significant and inverse effect on financial reporting quality. On the other hand, the moderating role of management system shows that as a supervisory arm plays an influential role in negative effects of management optimism on financial reporting quality because management influence system. Significant and positive is the quality of financial reporting.

Managers' personality traits have a significant relationship with financial reporting practices. Corporate Supervisory Arm, which is the corporate governance system, plays a role in adversely affecting management optimism on the quality of financial reporting. Therefore, corporate governance mechanisms can reduce opportunistic behavior, They can improve the quality of financial reporting by reducing agency costs.

 For the first time in this research, we have conducted a comprehensive analysis of the optimism criteria of management and the quality management system of financial reporting using a structured analysis approach that examines the impact of hidden criteria.