The Impact of Highly Valued Equity on the Relation between Audit Quality and Discretionary Accruals

The Impact of Highly Valued Equity on the Relation between Audit Quality and Discretionary Accruals

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In this study ,the impact of highly valued equity on the relationbetween audit quality and Discretionary Accruals in the companieslisted in Tehran Stock Exchange is investigated.Audit quality ismeasured by using of the audit firm size, audit industry specialization,the length of the auditor-client relationship and industry specialistaudit firms with long tenure.Also, Discretionary Accruals is estimatedusing the Jones model (1991).The results of investigating a read more sample of153 firms during the years of 1386 to 1392 shows that interactioneffect of highly valued equity and audit quality proxies is positive andsignificant.

This means that, magnitude of the negative effect of auditquality on the discretionary accruals in click here the highly valued firmsdecreases and high quality auditors not reducing amount ofDiscretionary Accruals in highly valued firms.Thus, in thenegotiation between auditors and managers about preparation offinancial statement in the highly valued equity, managers by using ofbetter information about its firm can success on auditors.