THE IMPACT OF AUDITOR CHARACTERISTICS ON THE QUALITY OF FINANCIAL REPORTS, TAKING INTO ACCOUNT THE ROLE OF THE COMPANY'S STRATEGY-CASE STUDY OF COMPANIES LISTED ON THE IRAQI STOCK EXCHANGE
Keywords:
hypotheses, relationship, financial reportingAbstract
This study examines the relationship between auditor characteristics and financial reporting quality, considering the role of company strategy. The statistical population of this research includes all companies listed on the Iraq Stock Exchange. Using systematic elimination, 35 companies were selected for the period from 2009 to 2021. The research hypotheses were tested using a multivariate regression model based on combined data. The results indicate that auditor rotation has a positive effect on financial reporting quality. Additionally, the results show that business strategy positively influences the relationship between auditor rotation and financial reporting quality.
References
Azizkhani, m , daghani, r, & greg s. (2019). Audit firm tenure and audit quality. International journal of accounting, 25(4).
Bajra, U. Codez, S. (2018). Audit committees and financial reporting quality: The 8th EU Company Law Directive perspective, Economic Systems, 42 (1): 151-163.
Barth, M.E., Li, K. and McClure, Ch. (2019). Evolution in Value Relevance of Accounting Information. Stanford University Graduate School of Business Research Paper. Working paper No.3512, 17-24.
Beest, F. V., Braam, G., & Boelens, S. (2009). Quality of Financial Reporting: Measuring Qualitative Characteristics. NICE Working Paper, Nijmegan Center for Economics (NICE).
Bentley, K.A., Omer, T.C. and Sharp, N.Y. (2013), “Business strategy, financial reporting irregularities, and audit effort”, Contemporary Accounting Research, Vol. 30 No. 2, pp. 780-817.
Biddle, G. and G. Hilary. (2006). Accounting quality and firm level capital investment. The Accounting Review, 81: 963–982.
Biddle, G. C., Hilary, G. and Verdi, R. S. (2009). How does financial reporting quality improve investment efficiency? Journal of Accounting and Economics, 48(2), 112-131.
Bushman, R.M. and Smith, A. (2003), “Transparency, financial accounting information, and corporate governance”, Economic Policy Review, Vol. 9, pp. 65-87.
Carcello, J.V. and Nagy, A.L. (2004). Client size, auditor specialization and fraudulent financial reporting. Managerial Auditing Journal, Vol. 19(5), 651.
Chen, C. (2021). The impact of deviant strategy on corporate innovation performance: the moderating role of equity incentives and market competition”, 6th International Conference on Financial Innovation and Economic Development (ICFIED 2021), March, Atlantis Press, pp. 235-239.
Chen, C.Y., Lin, C.J. and Lin, Y.C. (2008). Audit partner tenure, audit firm tenure, and discretionary accruals: does long auditor tenure impair earnings quality?. Contemporary Accounting Research, 25(2), 415-445.
Core, J. E., Guay, W. R. & Verdi, R. (2008). Is Accruals Quality a Priced Risk Factor? Journal of Accounting and Economics, 46(1), 2–22.
Dechow, P.M. and Dichev, I.D. (2002), “The quality of accruals and earnings: the role of accrual estimation errors”, The Accounting Review, Vol. 77 s-1, pp. 35-59.
DeFond, M. and Zhang, J. (2014). A review of archival auditing research. Journal of Accounting and Economics, 58, 275-326.
Francis, j., Olsson, P., and Schipper, K. (2006). Earnings Quality. Foundation and Trends in Accounting, 4 ( 1), 259-340.
Ghosh, A. and Moon, D. (2005). Auditor tenure and perceptions of audit quality. The Accounting Review, Vol. 80(2), 585-612.
Habib, A. and Hasan, M.M. (2020), “Business strategies and annual report readability”, Accounting and Finance, 60(3), 2513-2547.
Krishnan, G, Myllymaki, E & Nagar, N. (2021). Does financial reporting quality vary firm life cycle. Journal of Business Finance & Accounting, 48(5-6), 954.987.
Kusnadi, Y. (2016). Audit committees and financial reporting quality in Singapore. Journal of Business Ethics, 139 (1), 197–214.
Olson, E.M., Slater, S.F. and Hult, G.T.M. (2005), “The performance implications of fit among business strategy, marketing organization structure, and strategic behavior”, Journal of Marketing, Vol. 69 No. 3, pp. 49-65.
Patterson, E.R., Smith, J.R. and Tiras, S.L. (2019). The effects of auditor tenure on fraud and its detection. The Accounting Review, Vol. 94(5), 297-318.
Soroushyar. A. (2022). Auditor characteristics and the financial reporting quality: the moderating role of the client business strategy. Asian Journal of Accounting Research.
Yuan, Y., Lu, L.Y., Tian, G. and Yu, Y. (2020), “Business strategy and corporate social responsibility”, Journal of Business Ethics, Vol. 162 No. 2, pp. 359-377.
Downloads
Published
Issue
Section
License
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
