MD&A readability, auditor characteristics, and audit fees

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.

Download Full-text

The relationship between auditor characteristics and fraud detection

Journal of Facilities Management ◽

10.1108/jfm-02-2021-0024 ◽

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.

Download Full-text