Investigating the Relationship between the Principle of Conformity and Stock Price Synchrony with Emphasis on Environmental Uncertainty

Document Type : Original Article

Authors
Amir Mozafarnezhad 1
sina Kheradyar 2
Mansour Soufi 3
Mehdi Fadaei 3
1 Department of Industrial Management of Financial Orientation , Rasht Branch, Islamic Azad University, Rasht, Iran
2 , Department of Accounting, Rasht Branch, Islamic Azad University, Rasht, Iran
3 Department of Industrial Management, Rasht Branch, Islamic Azad University, Rasht, Iran
10.30495/jik.2025.23598
Abstract
Stock price synchronicity means the tendency of stocks in a market to change price in a similar direction. This price movement can be increasing or decreasing and depends on the market trend. The purpose of this study is to investigate the effect of uncertainty in the internal information environment due to fluctuations in operating cash flow on the relationship between the principle of conformity and the concurrence of stock prices. The research sample includes 158 companies listed on the Tehran Stock Exchange, which includes a period of 5 years from the beginning of 1393 to the end of 1397 in two groups of companies with high and low degree of compliance. The results show that uncertainty in the internal information environment due to fluctuations in operating cash flow in the group of companies with a low degree of compliance increases the synchronization of stock prices. In general, it can be concluded that the high degree of compliance, costs and revenues as a factor in more accurate forecasting of users and reducing their uncertainty about accounting information and the interaction of these two variables. Improves and improves the forecasting and decision making of users of accounting information and reduces the synchronization of stock prices.
Keywords
Stock price synchronization
compliance with the principle of conformity
uncertainty in the information environment
operating cash flow fluctuations
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