Audit Quality, Earnings Quality and Cost of Equity Capital

Subject Areas :

Mahdi Moradzadehfard ¹ , Mojtaba Adili ² , Seyed Javad Ebrahimian ³

1 - استادیار دانشگاه آزاد اسلامی واحد کرج
2 - کارشناس ارشد حسابداری دانشگاه علوم اقتصادی تهران
3 - عضو هئیت علمی دانشگاه مدیریت و حساب داری دانشگاه آزاد اسلامی واحد نور

Received: 2015-05-09 Accepted : 2015-05-09 Published : 2012-08-22

Keywords: Audit Quality, Accrual Quality, earnings quality, Cost of Equity Capital,

Abstract :

The major purpose of this paper is investigating and analyzing the influence of audit quality on the relation between accrual quality as a proxy for earnings quality and cost of equity capital. The sample data used for the research consisted of financial reporting by companies listed of the Tehran Stock Exchange(TSE). We examined the data of 103 companies 1384-1388. Using a pooled cross-sectional least squares regression, this study documents evidence that higher earnings quality leads to a lower cost of equity capital. The results also suggest that in companies with higher audit quality, there is a stronger relationship between earnings quality and cost of equity capital.

References:

 

آذر، عادل و منصور مؤمنی، (1383)، آمار و کاربرد آن در مدیریت، انتشارات سمت، چاپ دهم.

ابراهیمی کردلر، علی و سید عزیز سیدی، (1387)، نقش حسابرسان مستقل در کاهش اقلام تعهدی اختیاری، بررسی‌های حسابداری و حسابرسی، 54: 16-3.

بولو، قاسم، (1386)، هزینه حقوق صاحبان سهام و ویژگی‌های سود، رساله دکتری، دانشگاه علامه طباطبایی.

پورحیدری، امید و داوود همتی، (1383)، بررسی اثر قراردادهای بدهی، هزینه­های سیاسی، طرح‌های پاداش و مالکیت بر مدریرت سود در شرکت‌ها‌ی پذیرفته شده در بورس اوراق بهادار تهران، بررسی^‌های حسابداری و حسابرسی، 36: 63-47.

سجادی، سید حسین و رضا زارعی، (1386)، تأثیر ویژگی‌های مؤسسه­ حسابرسی و صاحبکار بر حق‌الزحمه حسابرسی، بررسی‌های حسابداری و حسابرسی، 49: 90-67.

علوی طبری، سید حسین و سیداحمد خلیفه سلطان و ندا شهبندیان، (1388)، کیفیت حسابرسی و پیش‌بینی سود، تحقیقات حسابداری، 3: 39-24.

قائمی، محمد‌حسین و علی جمال لیوانی و سجاد ده بزرگی، (1387)، کیفیت سود و بازده سهام شرکت‌ها، بررسی‌های حسابداری و حسابرسی، 52: 88-71.

 

Ahmed, A. S. and Rasmussen  S. J. and Tse, S. Y.(2008), "Audit Quality, Alternative Monitoring Mechanisms, and Cost of Capital: An Empirical Analysis",(August). Available at SSRN: http://ssrn.com/abstract=1124082.

 Azizkhani, M. and G. S. Monroe and G. Shailer (2009), "Auditor Tenure and Cost of Equity Capital", June, unpublished working paper, University of N.S.W.

 Behn, Bruce and K. Jong-Hang Choi and Tony Kang (2007), "Audit Quality and Properties of Analyst Earnings Forecasts". Electronic copy available at: http://www.ssrn.com.

Bharath, S. T. and J. Sunder and S. V. Sunder (2006), "Accounting quality and debt contracting", working paper ssrn.com.

Bhattacharya, N. and H. Desai and K. Venkataraman (2008), "Earnings Quality and Information Asymmetry: Evidence Trading Costs", working paper, ssrn.com.

Chuntao L. and Frank M.S. and Sonid M.L. (2007), "Audit Firm Size and Perception of Audit Quality: Evidences a Competitive Audit Market in Chima". Electronic copy available at: http://www.ssrn.com.

De Angelo (1981), "Auditor Size and Audit Quality". Journal of Accounting and Economics, PP. 189-199.

Francis, J. and R. LaFond and P. Olsson and K. Schipper (2004), "Cost of equity and earnings attributes". The Accounting Review 79: 967-1010.

Garcia-Teruel, P. J. and P. Martinez-Solano and J. P. Sánchez-Ballesta (2008), "Accruals quality and corporate cash holdings", Journal of Accounting and Finance.

Gray, P. and P.-S. Koh and Y. H. Tong (2009), "Accruals Quality, Information Risk and Cost of Capital: Evidence Australia", Journal of Business Finance and Accounting, vol. 36(1& 2), PP. 51-72.

Hodac, M.(2009), "The Earnings Game", Hodak Value Advisors; New York University - Markets, Ethics & Law(MEL) Program.

Hope, O. and Kang, T. T. and Wayne B. and Yoo, Y. K.(2008), "Impact of Excess Auditor Remuneration on Cost of Equity Capital Around the World", Journal of Accounting, Auditing and Finance, Forthcoming.

Li, Y. and Stokes, D.(2008), "Audit Quality and Cost of Equity Capital", 2^nd Workshop of Audit Quality, EIASM.

Li, Y. and Stokes, D. and Taylor S. and Wong, L.(2008), "Audit Quality, Accounting Attributes and the Cost of Equity Capital", Electronic copy available at: http://ssrn.com/abstract=1481823.

Meyer, M.J. and John T. Rigs (2007), "The impact of auditor-client relationships on the reversal of first time audit qualifications",  Managerial Auditing Journal, PP. 53-65.

Piot, C. and Janin, R.(2005), "Audit Quality and Earnings Management in France", Electronic copy available at: www.ssrn.com.

Peecha, Mark E.(2005), "It is all about audit quality: perspectives on strategic system auditing", Accounting organizations and society, PP. 4-10.

Verdi, R. S.(2006), "Financial reporting quality and investment efficiency", working paper, Massachusetts Institute of Technology(MIT).