Accounting quality in capital markets: An application on borsa Istanbul

Accounting literature doesn't provide a generally accepted definition of accounting quality. However, accounting standards regulatory authorities (FASB and IASB) deal with the concept based on providing useful information to users in their decision making process. The fundamental qualitative characteristics of useful financial information are determined by these authorities as "relevance" and "faithful representation". The purpose of this study is to measure the quality of accounting information reported in capital markets. In this study, accounting quality is defined as "providing useful information about financial position, operational results and cash flows of business to users in making economic decisions" consistent with the viewpoint of FASB and IASB. Accounting quality is a broad concept that contains various dimensions. In this study, a multidimensional approach is followed unlike the previous studies. Gretl Econometrics Package 1.9.14 version is used in empirical analysis. When the results of each dimension are evaluated as a whole, it's seen that they are consistent with each other and theoretical expectations. It is concluded that the accounting information reported in Borsa Istanbul (BIST) is well-qualified in the context of the period, sample, and quality dimensions used in this study.