The effect of information risk on the financial performance of the company with emphasis on the role of external monitoring

Increased risk in companies leads to increased returns and corporate information risk affects financial performance and the presence of external monitoring can affect the performance of the company. The present study examines the effect of information risk on the financial performance of the company with emphasis on the role of external monitoring. This research is applied in terms of purpose and is causal (post-event) in terms of correlation methodology. The sample of the present study includes 125 companies listed on the Tehran Stock Exchange for the years 1392 to 1397 and Stata software has been used to test the research hypotheses. The results of research hypotheses show that information risk has a direct impact on asset returns. Information risk has a direct impact on equity returns. Institutional ownership has a direct impact on the return on assets. Institutional ownership has a direct impact on equity returns. The independence of the board does not affect the return on assets. The independence of the board does not affect the return on equity. Institutional ownership has a direct impact on the relationship between information risk and return on assets. Institutional ownership has a direct impact on the relationship between information risk and return on equity. Board independence does not affect the relationship between information risk and return on assets. The independence of the board does not affect the relationship between information risk and return on equity. From the research results, it can be concluded that in companies, the higher the information risk, the higher the return on assets and the return on equity, and in companies with a high percentage of institutional ownership, the financial performance of the company improves.