Find in Library

The purpose of this study is to investigate effects of managers' behavioral bias on decision-making and information quality. The research sample consists of 161 firms listed in Tehran Stock Exchange in the period from 2013 to 2019. To test the hypotheses, multivariate regression method and panel data model are used.Results show that a manager overconfidence reduces the reliability of financial information and timely presentation of information. Managers' narcissism also reduces the reliability of financial statements and causes a delay in financial statements submission.  Myopic managers, who expect a position and point in a short term, manipulate accounting profits and reduce the reliability of financial information; however, this behavioral feature does not affect the timely presentation of information. The findings also show that managers' overconfidence has a significant positive relationship with the level of cash holdings and excessive investment. Managers' narcissism also leads to an increase in the level of cash holdings, but does not have a significant effect on over-investment. Managers' myopia also has a significant negative effect on investment expenditures, but has no effect on the level of cash holdings.