Accounting Disclosure, Value Relevance and Firm Life Cycle: Evidence from Iran

In this study the effect of accounting disclosure on value relevance in different stages of firm life cycle has been investigated. In order to do so, 101 companies listed on the Tehran Stock Exchange (Iran) between years 2005 to 2011 were chosen as sample. The sample firms were classified into four stages in the life cycle as Introduction, growth, maturity and Shake-Out (decline), by taking benefit from the cash flows pattern as a proxy for firm life cycle. Then in each of these stages of life cycle, the firms were classified into as high or low disclosure quality. The results of regression in ordinary least squares and Wald Test methods (to examine the significance of difference in the adjusted R squares) indicate that the relation between earnings and changes in earnings with stocks return (value relevance model) among the high and low quality disclosing companies at each stages of the life cycle are not significantly different from each other.