Abstract
The purpose of this study is to investigate the impact of financial reporting quality on corporate investment efficiency. We have
examined that firms with better and more financial reporting quality which is related in opposite direction with inefficiency of the
investment and termed as over-investment and under-investment. Investment decisions play vital role specifically not only for firms
but also for economy in general. No doubt, investment volume matters but the firms must emphasize quality of the investment and
financial reporting. Without having sufficient and reliable market reporting, no investment decision can be made that can benefit the
firm. In this study, the quality of financial reporting has been examined in making wise investment decisions. An explanatory
quantitative research design is used to postulate the model in automobile firms listed in PSX for a period from 2005 to 2018. Our
results show that firms having higher values of financial reporting quality have higher investment efficiency. Better financial
reporting quality creates trust and confidence among the shareholders and the potential investors due to which further improvements
in the efficiency of investment is possible. Further studies are needed to examine the investment efficiency through corporate
governance in other non-financial firms in Pakistan. Firms’ Financial Reporting Quality has been investigated to find out its role and
Investment Efficiency. It is postulated that firms with better financial reporting quality, show better investment efficiency. This study
is conducted to help the firms to improve their quality of reporting to enhance the efficiency of investment in the firms
Javed Iqbal, Areeba Khan. (2020) The Impact of Financial Reporting Quality on Investment Efficiency in Non-Financial Firms, Paradigms , Vol 14, Issue 1.
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