The impact of the quality of financial reports on the efficiency of investment in Egyptian companies listed on the stock exchange

Document Type : Original Article

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Accounting department Faculty of Commerce Alexandria University Alexandria Egypt

Abstract

This study aims to investigate the impact of financial reporting quality on investment efficiency.
 The study sample included 73 nonfinancial companies listed in Egyptian Exchange during the years 2008  2009.
            The findings show that 36% of firms suffer of overinvestment, while the majority of sample firms (64%) suffer  underinvestment. Additionally, the study found a significant negative relationship between financial reporting quality and underinvestment, which indicated that high financial reporting quality can reduce underinvestment. On the other hand, the study indicated that despite there is a negative relationship between quality of financial reporting and overinvestment, however, this relation is insignificant at 5% significance level.

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