The Mediating Role of Exploration and Evaluation Cost Disclosure Quality in the Relationship Between Digital Maturity and Earnings Quality: Evidence from Mining Companies Listed on the Tehran Stock Exchange
Keywords:
Digital maturity, earnings quality, disclosure quality, exploration and evaluation costs, mining companies, panel dataAbstract
This study aimed to examine the effect of digital maturity on earnings quality and determine whether the quality of exploration and evaluation cost disclosure mediates this relationship among mining companies listed on the Tehran Stock Exchange. This applied, quantitative, descriptive-correlational study employed an ex post facto panel-data design. The statistical population consisted of companies operating in the metallic ore, nonmetallic mineral, and coal extraction industries listed on the Tehran Stock Exchange from 2014 to 2024. Following systematic elimination based on continuity of activity, fiscal-year consistency, data availability, and absence of prolonged trading suspension, 14 companies were selected, yielding 154 firm-year observations. Earnings quality was measured as the negative absolute value of discretionary accruals estimated using the modified Jones model. Digital maturity was measured by information technology investment intensity, while disclosure quality was assessed through a ten-item checklist based on Iranian Accounting Standard No. 29. Firm size, financial leverage, and return on assets were included as control variables. Fixed-effects panel regressions with robust standard errors, the Sobel test, and bias-corrected bootstrap analysis with 5,000 resamples were conducted in Python. Digital maturity had a positive and significant effect on disclosure quality (beta = 0.150, t = 3.840, p < 0.001). Disclosure quality positively affected earnings quality (beta = 0.468, t = 2.026, p = 0.044), whereas the direct effect of digital maturity on earnings quality was nonsignificant (beta = 0.048, t = 0.596, p = 0.552). The estimated indirect effect was 0.070. Although the Sobel test was marginally significant (Z = 1.790, p = 0.073), the 95% bias-corrected and accelerated bootstrap confidence interval included zero, ranging from -0.0098 to 0.1580. Therefore, the mediating effect was not supported at the 5% significance level. Firm size and return on assets had significant negative effects on earnings quality. Digital maturity appears to improve the quality of exploration and evaluation cost disclosure, and higher disclosure quality is associated with better earnings quality; however, disclosure quality does not robustly mediate the relationship between digital maturity and earnings quality.
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Copyright (c) 2025 Fateme Delbarpoor Ahmadi (Author); Khadijeh Khodabakhshi Parijan
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