IDEAS home Printed from https://ideas.repec.org/a/rom/rmcimn/v11y2010i5p940-960.html
   My bibliography  Save this article

An Investigation of the Effect of Audit Quality on Accrual Reliability of Listed Companies on Tehran Stock Exchange

Author

Listed:
  • Mahdi SALEHI

    (Accounting and Management Department, Guilan University, Iran)

  • Saeid Jabarzadeh KANGARLOUEI

    (Islamic Azad University, Orumieh Branch, Iran)

Abstract

This study investigates the effect of audit quality on accrual reliability of listed companies on Tehran Stock Exchange. In order to determine audit quality has been used of two criteria of auditor level and auditor commission period and due to calculate accrual reliability in following of Richardson et al., (2005) model and of stability of accrual. The study covers 74 listed companies on Tehran Stock Exchange during 2005-2009 periods. Also, multiple linear regression models and data investigation method have been used sectional and annual investigation to test research hypotheses. Research findings indicate that audited firms with higher audit quality as compared by audited firms with lower quality have more accrual stability coefficient and finally, they have more accrual reliability.

Suggested Citation

  • Mahdi SALEHI & Saeid Jabarzadeh KANGARLOUEI, 2010. "An Investigation of the Effect of Audit Quality on Accrual Reliability of Listed Companies on Tehran Stock Exchange," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 11(5), pages 940-960, December.
    • Handle: RePEc:rom:rmcimn:v:11:y:2010:i:5:p:940-960
    as

    Download full text from publisher

    File URL: https://www.rmci.ase.ro/no11vol5/15.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Richardson, Scott A. & Sloan, Richard G. & Soliman, Mark T. & Tuna, Irem, 2005. "Accrual reliability, earnings persistence and stock prices," Journal of Accounting and Economics, Elsevier, vol. 39(3), pages 437-485, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ashkan Mirzay Fashami & Pran Krishansing Boolaky & Kamil Omoteso, 2020. "Threats to Auditor Independence: Evidence from Iran," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 6(4), pages 253-302, October.
    2. Loveday A. Nwanyanwu, 2017. "Audit Quality Practices and Financial Reporting in Nigeria," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 7(2), pages 145-155, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dichev, Ilia D. & Qian, Jingyi, 2022. "The benefits of transaction-level data: The case of NielsenIQ scanner data," Journal of Accounting and Economics, Elsevier, vol. 74(1).
    2. Mei Luo & Shuai Shao & Frank Zhang, 2018. "Does financial reporting above or below operating income matter to firms and investors? The case of investment income in China," Review of Accounting Studies, Springer, vol. 23(4), pages 1754-1790, December.
    3. Simi Kedia & Thomas Philippon, 2009. "The Economics of Fraudulent Accounting," The Review of Financial Studies, Society for Financial Studies, vol. 22(6), pages 2169-2199, June.
    4. Narongdech Thakerngkiat & Hung T. Nguyen & Nhut H. Nguyen & Nuttawat Visaltanachoti, 2021. "Do accounting information and market environment matter for cross‐asset predictability?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(3), pages 4389-4434, September.
    5. Carlos J.O. Trejo-Pech & Richard N. Weldon & Michael A. Gunderson, 2016. "Earnings Management through Specific Accruals and Discretionary Expenses: Evidence from U.S. Agribusiness Firms," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 64(1), pages 89-118, March.
    6. Cederburg, Scott & O’Doherty, Michael S. & Wang, Feifei & Yan, Xuemin (Sterling), 2020. "On the performance of volatility-managed portfolios," Journal of Financial Economics, Elsevier, vol. 138(1), pages 95-117.
    7. Gikas Hardouvelis & George Papanastasopoulos & Dimitrios D. Thomakos & Tao Wang, 2007. "Accruals, Net Stock Issues and Value-Glamour Anomalies: New Evidence on their Relation," Working Paper series 47_07, Rimini Centre for Economic Analysis.
    8. Cheng, Che-Hui & Wu, Po-Chin, 2013. "Nonlinear earnings persistence," International Review of Economics & Finance, Elsevier, vol. 25(C), pages 156-168.
    9. Adam Zaremba & Jacob Koby Shemer, 2018. "Price-Based Investment Strategies," Springer Books, Springer, number 978-3-319-91530-2, June.
    10. Dinh, Tami & Schultze, Wolfgang, 2022. "Accounting for R&D on the income statement? Evidence on non-discretionary vs. discretionary R&D capitalization under IFRS in Germany," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 46(C).
    11. Dody Hapsoro* & Aghni Mira Shufia, 2018. "Does Managerial Ownership Moderate the Effect of Managerial Ability on Earnings Quality? A comparative Study of Manufacturing Companies in Indonesia and Malaysia," The Journal of Social Sciences Research, Academic Research Publishing Group, pages 639-647:2.
    12. David Hirshleifer & Sonya S. Lim & Siew Hong Teoh, 2011. "Limited Investor Attention and Stock Market Misreactions to Accounting Information," The Review of Asset Pricing Studies, Society for Financial Studies, vol. 1(1), pages 35-73.
    13. Bradshaw, Mark T. & Richardson, Scott A. & Sloan, Richard G., 2006. "The relation between corporate financing activities, analysts' forecasts and stock returns," Journal of Accounting and Economics, Elsevier, vol. 42(1-2), pages 53-85, October.
    14. Geertsema, Paul & Lu, Helen, 2020. "The correlation structure of anomaly strategies," Journal of Banking & Finance, Elsevier, vol. 119(C).
    15. Nezlobin, Alexander & Sloan, Richard G. & Giedt, Jenny Zha, 2022. "Construct validity in accruals quality research," LSE Research Online Documents on Economics 112165, London School of Economics and Political Science, LSE Library.
    16. David Hirshleifer & Kewei Hou & Siew Hong Teoh, 2012. "The Accrual Anomaly: Risk or Mispricing?," Management Science, INFORMS, vol. 58(2), pages 320-335, February.
    17. Mingzi Song & Naoto Oshiro & Akinobu Shuto, 2016. "Predicting Accounting Fraud: Evidence from Japan," The Japanese Accounting Review, Research Institute for Economics & Business Administration, Kobe University, vol. 6, pages 17-63, December.
    18. Eliwa, Yasser & Haslam, Jim & Abraham, Santhosh, 2021. "Earnings quality and analysts’ information environment: Evidence from the EU market," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 42(C).
    19. Lu Zhang, 2017. "The Investment CAPM," European Financial Management, European Financial Management Association, vol. 23(4), pages 545-603, September.
    20. Kewei Hou & Haitao Mo & Chen Xue & Lu Zhang, 2019. "Security Analysis: An Investment Perspective," NBER Working Papers 26060, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    audit quality; auditor size; auditor tenure; accrual reliability.;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rom:rmcimn:v:11:y:2010:i:5:p:940-960. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marian Nastase (email available below). General contact details of provider: https://edirc.repec.org/data/mnasero.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.