Rezaei Pitenoei, YasserSafari Gerayli, MehdiAbdollahi, Ahmad2021-09-082021-09-0820211753-8394http://hdl.handle.net/10400.1/17057Purpose The purpose of this study is to investigate the relationship between financial reporting quality and information environment (IE) in firms listed on the Tehran Stock Exchange (TSE). Design/methodology/approach In this study, composite measures were used as the proxy to measure financial reporting quality and IE. In this regard, a sample of 1,490 firm-year observations of the firms listed on the TSE during the years 2008 to 2017 and a multivariate regression model was used to examine the research hypothesis. Findings Findings indicate that financial reporting quality has a positive relationship with firms' IE. This result is robust to the alternate measure of financial reporting quality and endogeneity problem. Originality/value The present study is the first study to develop a composite measure for the firms' IE in the Iranian capital market. As a result, it not only expands the theoretical literature on the firms' IE but also helps policymakers, regulators, investors and financial reporting users make informed decisions.engFinancial reporting qualityFirms' information environment (IE)Composite measuresBusiness & Economicsjournal article10.1108/IMEFM-04-2019-0146