The Impact of Mandatory Disclosure on Weak Internal Controls on Company Investment Decisions

One of the corporate governance components is always the establishment of effective internal controls. For a long time, internal controls have been a concern for managers on the one hand, and capital owners and other stakeholders in business units on the other, because they are aware of the importance of these controls in achieving the goals of the economic unit. The purpose of this study is to investigate the effect of mandatory disclosure of the weakness of internal controls on the company's investment decisions in the Tehran Stock Exchange. This study was conducted in the period from 2012 to 2017 for companies active in the Tehran Stock Exchange, by selecting 174 companies as a statistical sample and using multivariate regression test in EVIEWS statistical software. The results of the hypothesis test indicate that the mandatory disclosure of the weakness of internal controls has a significant and positive effect on investment decisions in companies listed on the Tehran Stock Exchange.