The Impact of the Auditor Tenure on Earnings Quality under of Information Asymmetry Between auditor and manager

Subject Areas : HSE Management

Mojtaba Motalebian ¹ , Mehdi Arabsalehi ² , Hadi Amiri ³

1 - PhD Student, Department of Accounting, Isfahan Branch (Khorasgan), Islamic Azad University, Isfahan, Iran
2 - Associate Professor, Department of Accounting, University of Isfahan, Isfahan, Iran
3 - Assistant Professor, Department of Economics, University of Isfahan, Isfahan, Iran

Received: 2020-02-06 Accepted : 2021-09-19 Published : 2021-08-23

Keywords: Auditor Tenure, Audit Quality, earnings quality, Accruals Quality, Auditor-Manager Information Asymmetry,

Abstract :

Previous research on the impact of the auditor's tenure on earnings quality has had conflicting results. Based on the independence hypothesis, some researchers believe that increasing auditor tenure reduces the earnings quality. According to the specialty hypothesis, some researchers believe that increasing the tenure of an auditor leads to an increase in the earnings quality. In this study, to evaluate these two competing perspectives, the information asymmetry Between auditor and manager was used as a moderating variable. Therefore, the purpose of the present study is to investigate the impact of auditor's tenure on earnings quality under of information asymmetry between auditor and manager. For this purpose, the financial information of 103 companies listed in Tehran Stock Exchange between 2009 and 2018 was used. Data analysis was done by panel regression model. The results indicate that the auditor's tenure has a positive effect on earnings quality. The results also showed that the auditor tenure in firms with a higher level of information asymmetry between auditor and manager results in greater earnings quality.

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