scholarly journals The effect of auditor characteristics on tax avoidance of Iranian companies

2020 ◽  
Vol 27 (2) ◽  
pp. 119-134 ◽  
Author(s):  
Mahdi Salehi ◽  
Hossein Tarighi ◽  
Tahereh Alidoust Shahri
Keyword(s):  
Stock Exchange ◽  
Emerging Market ◽  
Tax Avoidance ◽  
Audit Fees ◽  
Industry Specialization ◽  
Content Type ◽  
Auditor Industry Specialization ◽  
Auditor Tenure ◽  
The Relationship ◽  
Auditor Characteristics

Purpose The purpose of this paper is to investigate the relationship between auditor characteristics and the level of tax avoidance in an emerging market. Design/methodology/approach In this regard, the effect of various factors such as auditor tenure, auditor industry specialization, audit reports and audit fees on tax avoidance was examined. The study sample includes listed companies in the Tehran Stock Exchange. The time period of study is six years from 2011 to 2016. Also in this study, firm size, leverage, firm age and auditor size were controlled. Findings The results of this research were determined in four hypotheses. First and second hypotheses that explore the relationship between auditor tenure and auditor industry specialization with tax avoidance were not confirmed. But the results showed a significant relationship between the type of audit opinions and audit fees with tax avoidance. Originality/value The current study investigates the auditor characteristics on tax avoidance in a developing nation of Iran and the results may helpful the developing countries.

The relationship between auditor characteristics and fraud detection

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jalil Khaksar ◽  
Mahdi Salehi ◽  
Mahmoud Lari DashtBayaz
Keyword(s):  
Multiple Regression ◽  
Significant Relationship ◽  
Stock Exchange ◽  
Fraud Detection ◽  
Financial Statements ◽  
Audit Fees ◽  
Multiple Regression Model ◽  
Content Type ◽  
The Relationship ◽  
Auditor Characteristics

Purpose This paper aims to analyze the relationship between the following auditor's characteristics with detecting frauds in the listed companies on the Tehran Stock Exchange. Design/methodology/approach A multiple regression model is used to test the research hypothesis. The hypothesis was further tested with a sample of 187 companies listed on the Tehran Stock Exchange (1,309 observations) from 2012 to 2018 and by using multiple regression models based on panel data and the random-effects model. Findings The results suggest a positive and significant relationship between audit firms' size, auditor rotation, specialization in the industry, the audit market's focus, auditor's independence, audit report lag and renewal of financial statements with fraud detection. The results revealed a significant relationship between the period of auditor tenure, auditor's narcissism, audit fees and the type of auditors' opinion (un-qualified opinion) with fraud detection. Originality/value As the present study is a pioneer in examining this issue in the emerging markets, it provides users, analysts and legal entities with useful information about auditor characteristics that significantly affect the fraud detection of financial statements. The results mitigate the literature gap and improve knowledge in this area.

The impact of financial crisis on audit quality and audit fee stickiness: evidence from Iran

2019 ◽  
Vol 17 (2) ◽  
pp. 201-221 ◽  
Author(s):  
Mahdi Salehi ◽  
Farzaneh Komeili ◽  
Ali Daemi Gah
Keyword(s):  
Financial Crisis ◽  
Audit Quality ◽  
Stock Exchange ◽  
Emerging Market ◽  
Audit Fees ◽  
Influential Factors ◽  
Industry Specialization ◽  
Content Type ◽  
Random Effects Models ◽  
The Impact

Purpose There is a few studies about stickiness and changes in audit fees. In previous studies, researchers focused on fees behavior, which is expected to change in the short term, regardless of mentioning stickiness of fees and its possible changes. In this study, the authors investigate stickiness of audit fees and the influential factors, specifically audit quality and financial crisis in an emerging economy. Design/methodology/approach Audit quality is examined under three main criteria, namely, auditor size, auditor industry specialization and auditor tenure. The Altman adjusted bankruptcy model is used to identify firms’ financial crisis. In this study, listed companies in Tehran stock exchange market is investigated during the period of 2009-2015. Multiple regression models are used to test research hypotheses. Furthermore, Chow and Hausman tests are selected to choose among hybrid, fixed and random effects models. Findings The findings show no significant relationship between audit quality and audit fees stickiness. The authors also find that financial crisis has no impact on the association between audit quality and audit fees stickiness. Originality/value The current study almost is the first study, which conducted in emerging market of Iran. So, the results may play a helpful role for developing nations.

The relationship between political connections, auditor characteristics and auditor narcissism

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jalil Khaksar ◽  
Mahdi Salehi ◽  
Mahmoud Lari DashtBayaz
Keyword(s):  
Audit Quality ◽  
Stock Exchange ◽  
Political Connections ◽  
Industry Specialization ◽  
Content Type ◽  
Listed Firms ◽  
Political Relations ◽  
The Government ◽  
The Relationship ◽  
Auditor Characteristics

Purpose This study aims to assess the relationship between political connections, auditor characteristics (audit quality and industry specialization) and auditors’ intrinsic characteristics (narcissism) in listed firms on the Tehran Stock Exchange. In other words, this paper attempts to answer the question “whether political connections, audit quality and industry specialization contribute to the growth of narcissism and overconfidence of auditors of listed firms on the Tehran Stock Exchange or not.” Design/methodology/approach A multivariate regression model is used for hypothesis testing. The study’s hypotheses were also examined using a sample of 768-year firm listed on the Tehran Stock Exchange during 2013–2018 and by using the multiple regression pattern. Findings The obtained results indicate a negative and significant association between political relations, narcissism and overconfidence. The auditor’s overconfidence will go down by increasing political relations. Moreover, the results show a positive and significant relationship between audit quality, industry specialization and narcissism. On the other hand, to the best of authors’ knowledge, this study measured, for the first time, the severity of political connections by using the exploratory factor analysis of eight variables (long-term liabilities, firm size, financial leverage, export, human resources, major governmental shareholders, board members affiliated to the government and institutional ownership). Originality/value The authors figured out that few studies carried out, so far, in the emergent markets on political connections and their impacts on narcissism and overconfidence of auditors, so this paper aims to assess the effect of such a phenomenon in the emergent markets and contributes to the development of knowledge and science in this field.

scholarly journals The Effect of Overvalued Equity on the Relationship between Audit Quality and Earning Quality (Evidence from Iran)

2015 ◽  
Vol 46 ◽  
pp. 119-128
Author(s):  
Seyed Kazem Ebrahimie ◽  
Ali Bahraminasab ◽  
Fatemeh Khorram
Keyword(s):  
Audit Quality ◽  
Stock Exchange ◽  
Sample Population ◽  
Industry Specialization ◽  
Audit Firm ◽  
Auditor Industry Specialization ◽  
Auditor Tenure ◽  
Reverse Relationship ◽  
Earning Quality ◽  
The Relationship

The purpose of this article is to investigate the effect of overvalued equity on the relationship between audit quality and earning quality. In this article audit firm size, auditor industry specialization and auditor tenure were used as audit quality variable. The sample population consists of 189 companies listed in Tehran stock Exchange during the period 2008 to 2012. To test the hypotheses, OLS in Eviews has been used and investigation method of data is panel. The results show a reverse relationship between all audit quality variables and absolute discretionary accruals indicating that high audit quality causes higher earning quality. But the existence of overvalued equity cause decreasing or reversing of these relationships, in other words, when a firm is highly valued the accruals’ decreasing effect of high quality auditors is reduced.

The relationship between audit components and audit expectation gap in listed companies on the Tehran stock exchange

2019 ◽  
Vol 18 (1) ◽  
pp. 199-222 ◽  
Author(s):  
Mahdi Salehi ◽  
Fariba Jahanbin ◽  
Mohammad Sadegh Adibian
Keyword(s):  
Regression Model ◽  
Multiple Regression ◽  
Stock Exchange ◽  
Audit Fees ◽  
Listed Companies ◽  
Multiple Regression Model ◽  
Content Type ◽  
Expectation Gap ◽  
Audit Firms ◽  
The Relationship

Purpose The expectation gap between auditors and users has recently been the topic of many controversies. This paper aims to evaluate the relationship between auditor’s characteristics and audit expectation gap among information users in listed companies on the Tehran stock exchange market. In other words, the study attempts to find whether there is a significant relationship between audit components and the audit expectation gap or not. Design/methodology/approach The multiple regression model is used to test the hypotheses. Research hypotheses are tested using a sample of 78 listed companies on the Tehran stock exchange during 2012-2016, by using integrated data technique of the multiple regression model. Findings The findings show that standard audit fees are not significantly associated with the audit expectation gap. Furthermore, audit fees are negatively associated with the audit expectation gap, which provides that allocated audit price in financial statements gives useful information for external and internal individuals. Predictably, it is recommended that audit opinion significantly determines the level of the audit expectation gap. The authors also find that the independence of the director boards and audit committee members fulfill the expectation gap of individual users. Moreover, finding the negative impact of audit firms ranking on the expectation gap, supports the idea of higher ranked audit firms provide high quality services, and consequently, more reliable information. Finally, the results show that the audit record is positively associated with the audit expectation gap. Originality/value As all recent studies on the expectation gap were qualitative, the present study is the first paper, which measures the expectation gap quantitatively through the statistical method.

The relationship between the companies’ political connections and audit fees

2020 ◽  
Vol 27 (4) ◽  
pp. 1123-1141 ◽  
Author(s):  
Mahdi Salehi
Keyword(s):  
Stock Exchange ◽  
Audit Fees ◽  
Political Connections ◽  
The Political ◽  
Content Type ◽  
Inverse Effect ◽  
Political Relationships ◽  
Auditor Selection ◽  
Relationship Of ◽  
The Relationship

Purpose The purpose of this study is to investigate whether the political connections of companies are correlated with auditor selection, audit fees and abnormal audit fees. Design/methodology/approach The research data contains 756 observations of companies listed on the Tehran Stock Exchange during 2011-2019. In this study, the relationship between companies with political relationships and the selection of a qualified auditor, audit fees and abnormal audit fees are reviewed. The regression used for test the hypotheses. Findings The results of hypotheses testing indicate that there is a positive and significant correlation between the political relationships of companies and certified auditor selection, auditing fees and abnormal audit fees. In addition, the political relationships of companies have a significant and inverse effect on the relationship between institutional ownership and auditing fee and abnormal audit fees. It was also found that there is a positive and significant correlation between companies and political relationships and abnormal audit fees. Originality/value So far several studies conducted on audit fees, however, no study conducted on the relationship of political relationship of the companies with audit fees and the results of the current study may bridge the gap in the current field.

The relationship between managerial ability, earnings management and internal control quality on audit fees in Iran

2019 ◽  
Vol 69 (4) ◽  
pp. 685-703 ◽  
Author(s):  
Mahdi Salehi ◽  
Mahmoud Mousavi Shiri ◽  
Seyedeh Zahra Hossini
Keyword(s):  
Earnings Management ◽  
Internal Control ◽  
Significant Relationship ◽  
Stock Exchange ◽  
Audit Fees ◽  
Real Earnings Management ◽  
Managerial Ability ◽  
Content Type ◽  
Control Quality ◽  
The Relationship

Purpose The purpose of this paper is to emphasize the relationship between managerial ability, earnings management, internal control quality and audit fees to establish whether or not there is a significant relationship between the variables of managerial ability, earnings management, internal control quality and the audit fees. Design/methodology/approach The study sample includes 190 listed companies on the Tehran Stock Exchange during 2009–2016. Research hypotheses were tested using the statistical methods of multivariable linear regression and data envelopment analysis pattern. Findings The obtained results indicate that there is a significant and direct relationship between managerial ability and internal control quality as well as real earnings management and internal control quality. Based on the results obtained from the second hypothesis, the authors could claim that there is an inverse and significant relationship managerial ability and audit fees. The third hypothesis also revealed that in companies with lower audit fees, there is a stronger relationship between managerial ability and internal control quality. The results of related tests show no significant relationship between accrual-based earnings management and internal control quality. Originality/value This paper is the first study in Iran whose main focus is on the relationship between managerial ability, earnings management, internal control quality and audit fees.

scholarly journals AUDIT TENURE, AUDITOR INDUSTRY SPECIALIZATION AND AUDIT LAG REPORT ON THE FINANCIAL SECTOR ON THE INDONESIA STOCK EXCHANGE 2013-2017

2019 ◽  
Vol 9 (2) ◽  
pp. 151
Author(s):  
Ninda Mufidah ◽  
Nujmatul Laily
Keyword(s):  
Stock Exchange ◽  
Secondary Data ◽  
Sampling Technique ◽  
Data Retrieval ◽  
Financial Sector ◽  
Audit Report ◽  
Industry Specialization ◽  
Auditor Industry Specialization ◽  
Analysis Technique ◽  
The Relationship

The purpose of this study is to analyze the effect of audit tenure, audit report lag, and industry auditor specialization on financial sector companies listed on the Indonesia Stock Exchange (IDX) in 2013-2017. In addition to this study examining the effect of Audit Tenure (X) on audit report lag (Y), this study also examined auditor industry specialization (Z) influencing the relationship between audit tenure and audit report lag. The population of this study were all financial sector companies listed on Indonesia Stock Exchange (IDX) in 2013-2017. The sampling technique in this study used purposive sampling and the data sources used secondary data with documentation data retrieval techniques. The total number of companies used as research samples is 55 companies. The data analysis technique used in this study is the Moderated Regression Analysis (MRA) with SPSS 25 for Windows. The results of the study show that: (1) audit tenures haven’t a significant effect on audit report lag and (2) auditor industry specialization is not able to weaken the influence of audit tenure on audit report lag.

scholarly journals Characteristics of auditors’ non-audit services and accruals quality in Malaysia

2020 ◽  
Vol 32 (2) ◽  
pp. 147-175
Author(s):  
Wahab Effiezal Aswadi Abdul ◽  
Wan Zurina Nik Abdul Majid ◽  
Iman Harymawan ◽  
Dian Agustia
Keyword(s):  
Stock Exchange ◽  
Descriptive Analysis ◽  
Audit Fees ◽  
Potential Effect ◽  
Auditor Independence ◽  
Related Services ◽  
Content Type ◽  
Accruals Quality ◽  
The Relationship ◽  
Non Audit Services

Purpose The purchase of non-audit services from incumbent auditors has generated considerable attention. This study aims to examine the relationship between characteristics of non-audit services, namely, the recurrence and types of services, and accruals quality in Malaysia. Design/methodology/approach This study analyzed hand-collected audit and non-audit fees of 1,117 observations from Malaysian firms from 2009 to 2011. This study used descriptive analysis, univariate tests and multivariate regression to investigate the potential effect of non-audit services on accruals quality. Findings Non-audit services are associated with lower accruals quality. Recurring and non-recurring non-audit service fees are detrimental to the quality of accruals, as are all types of recurring non-audit services. Only non-recurring audit-related services decrease accruals quality. The results demonstrate that provisions of non-audit services create economic bonding, and thus a threat to auditor independence. Results remain robust with the inclusion of corporate governance and institutional variables. Research limitations/implications The sample period might represent a limitation as it only covers three years of data. This limitation is mainly because of the nature of data collection of the non-audit services fees. Practical implications The findings could suggest a refinement on the Malaysian Institute of Accountants (MIA) by-laws focusing on auditor independence, and it could assist other regulative bodies such as the Securities Commission, the stock exchange (Bursa Malaysia) in ensuring better governance on the provision of non-audit services. Originality/value This study is the first that provides evidence on the relationship between non-audit services, types, and recurring and non-recurring non-audit services and accruals quality in Malaysia.

Tax avoidance, tax risk and the cost of debt in a bank-dominated economy

2018 ◽  
Vol 33 (8/9) ◽  
pp. 683-699 ◽  
Author(s):  
Jost Hendrik Kovermann
Keyword(s):  
Interest Rates ◽  
Design Methodology ◽  
Stock Exchange ◽  
Tax Avoidance ◽  
Research Literature ◽  
Cost Of Debt ◽  
Content Type ◽  
Negative Effect ◽  
The Cost ◽  
The Relationship

Purpose The purpose of this paper is to investigate whether tax avoidance has a positive or negative effect on firms’ cost of debt. It further investigates whether the implications for the cost of debt are different for tax avoidance and tax risk. Design/methodology/approach Based on a sample of 201 firms listed on Frankfurt Stock Exchange from 2009 to 2014, three tests are performed using pooled OLS regression. Controlling for numerous variables that have been found to influence the cost of debt, a first model examines the relationship between tax avoidance and the cost of debt. A second model examines the relationship between tax risk and the cost of debt and a third model interacts tax avoidance with tax risk. Findings The results show that tax avoidance has a negative effect on the cost of debt; however, tax risk increases the cost of debt. These results indicate that creditors generally view tax avoidance as positive and that tax avoidance is not regarded as inherently risky. Although tax avoidance is rewarded by capital markets with lower interest rates, tax risk contributes to higher interest rates. The effect of tax avoidance on the cost of debt depends therefore on the level of tax risk. Originality/value This paper contributes to two distinct strands of research: literature investigating the driving factors behind the cost of debt and literature investigating the consequences of firms’ tax avoidance activities.

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