The mediating role of earnings predictability and comparability in the influence of the governance component of sustainable performance reporting on the crash risk of stock price and stock liquidity

Due to the importance that investors place on the return of their shares, the phenomenon of falling share prices leads to a decrease in returns. Many researchers believe that the changes in the company's stock price originate from its internal information management. Since the stock price changes not only through financial information but also through social, governance, economic and environmental information, therefore publishing a special report such as the governance dimension of sustainable performance reporting can affect the liquidity of stocks and the crash risk. Using the structural equation modeling approach, the present research seeks to predict the crash risk of stock price and its liquidity through governance sustainablity reporting and the forecasting accuracy and earnings comparability. Using the systematic elimination method, 147 companies listed on the Tehran Stock Exchange for the period of 2011 to 2014 selected as a sample. PLS software used to analyze the data. The results showed that the governance component of sustainablity performance reporting leads to an increase in the comparability of earnings, an increase in the liquidity of stocks and a reduction in the crash risk of stock prices. Other findings showed that the comparability of earnings has a mediating role on the relationship between the reporting of sustainable governance performance and the crash risk of stock and liquidity. Meanwhile, the accuracy of the earnings forecast does not have a significant effect on the crash risk of the stock price and the liquidity.