Purpose The purpose of this article is to investigate the relationship between environmental disclosure quality (EDQ) and risk and to further examine whether corporate governance (CG) practices moderate this relationship. Design/methodology/approach This study uses a set of unique, hand collected data (from 2011 to 2016) to measure EDQ for a sample of 762 firm-years Iranian listed companies. Ordinary least squares regression analysis is performed in testing hypotheses after controlling for a variety of firm, industry and year effects. Moreover, several analyses are performed to establish the robustness of the findings. Findings The results indicate a negative association between EDQ and firm risk. While board independence moderates this relationship, other CG practices such as CEO duality and board size do not show any effects on the relationship between EDQ and risk. The results remain robust after performing sensitivity tests and under various specifications, including the fixed-effects panel data and Heckman two-stage regressions. Research limitations/implications Results are from a sample of firms from one country. Practical implications The results have implications for policymakers, legislators and corporate executives, as environmental initiatives are gaining more attention worldwide. Social implications Sustainability initiatives in the areas of environmental and social performance and disclosure are gaining global attention. This study addresses the link between firm risk and EDQ. Originality/value This study contributes to the literature by shedding light on the relationship between corporate risk-taking and EDQ in the context of a developing economy.

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Purpose The purpose of this study is to examine the impact of financial statement comparability as a qualitative feature of financial reporting on cash holdings and the mediating role of disclosure quality and financing constraints in firms listed on the Tehran Stock Exchange (TSE). Design/methodology/approach Using panel data from 110 TSE-listed firms from 2011 to 2017 in Iran, this study uses the regression analysis to examine the research hypotheses. The first hypothesis examines the relationship between financial statements comparability and cash holdings and two other hypotheses examine the mediating role of financing constraints and disclosure quality in this relationship. Findings Based on pecking-order theory and institutional context of Iranian firms, the results show that financial reporting comparability has a significant negative impact on corporate cash holdings. The results also show that disclosure quality and financing constraints have no mediating role in the relationship between accounting comparability and cash holdings. The robustness tests with alternative measures of accounting comparability and cash holdings support the findings of this study. Research limitations/implications The limitations of this study are as follows: limited number of TSE companies that have necessary data to conduct research; and using the disclosure quality scores provided by TSE organization. Practical implications The findings suggest that creditors should consider the financial status and also the quality of financial reporting of companies, before granting credit to them. It is also recommended that regulators in the capital market publish the ratings of companies in terms of financial statement comparability alongside the disclosure ratings and a continuous regulatory oversight on companies. Originality/value To the best of the authors’ knowledge, this is the first empirical research on the effect of accounting comparability on the level of cash holdings that examines the mediating role of financing constraints in the context of Iran market as an emerging economy. Moreover, this is the first empirical research that studies the effect of disclosure quality on this relationship.