The impact of investors' excessive biased expectations on opaque financial reporting

Abstract EN

This research investigates the influence of investors' biased expectations on the opacity of financial reporting.

Excessive biased expectations reflect optimism or pessimism of investors toward certain security or a particular financial market.

Sample size consists of 83 companies listed in the Egyptian stock exchange.

Three measures can be used to measure investors' biased expectations: Share Turnover, E Share, and dividend premium.

Three measures can be used to measure financial reporting opacity: earnings management, quality of auditors and the type of audit opinion.

Results imply that, companies with greater opaque financial reporting environment are more affected by excessive biased expectations of investors.