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Number and Type of Audit Qualification Paragraphs: Audit Firms’ Characteristics as Differentiation Surrogates
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Fakhroddin MohammadRezaei *    1, AliAkbar Yousefi1 |
| 1- Kharazmi University, |
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Abstract: (2560 Views) |
| According to the extant theoretical and empirical evidence, differentiated auditors (highly- ranked, with high reputation, affiliated with international audit firms, and with large market share) is likely to have different audit reporting policies (number, nature, and repetitive and non-repetitive audit qualification paragraphs). In the lack of sufficient empirical evidence in relation to the characteristics of audit firms and their reporting policies in Iran, the present study examines this issue. Therefore, 928 firm-year observations from 2012 to 2019 are examined. Generally, none of the four characteristics of audit firms has a significant relationship with the number, nature and repetitive and non-repetitive AQPs. Only highly-ranked audit firms has a positive and significant relationship with incorrect calculation of the cost of goods sold. In terms of practical implications, in general, it can be highlighted that the available indicators to differentiate auditors in the Iranian audit market are not efficient. Therefore, the findings of this study can be useful in legislation and decision making regarding to the choosing and dismissal of auditors by client firms. |
Article number: 4 |
| Keywords: Audit firms characteristics, number of AQPs, nature of AQPs, repetitive and non-repetitive AQPs |
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Full-Text [PDF 743 kb]
(104 Downloads)
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Type of Study: Research |
Subject:
Special
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