Asia Pacific Journal of Innovation and Entrepreneurship, Volume (11), No (3), Year (2017-12) , Pages (366-390)

Title : ( The impact of financial restatement on auditor changes: Iranian evidence )

Authors: azam eshaghnia , Mahdi Salehi ,

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Abstract

Purpose This paper aims to examine the effect of financial restatement on changing the auditor in the following years. Design/methodology/approach The study uses data of 105 companies (735 company-years) listed on the Tehran Stock Exchange collected during the period 2008-2014. Logistic regression is used to test the hypotheses. Findings The results of hypotheses present that restatement does not cause auditor changes and that as the severity of a restatement increases, the auditor change in the following year of restatement also does not increase. Restating companies having strong governance do not go for auditor changes as compared with other companies. In addition, in companies that are restating, non-big auditor changes are not more likely than a big auditor. Also, in companies restating simultaneous with a CEO turnover, there is no possibility of auditor change. Furthermore, multinomial logistic regression showed that the adjustments resulting from the correction of errors and changes in procedures and the amount of adjustments do not cause auditor change in the following year. So, the results have shown that the restatement is not an important factor in changing auditor the next year. Originality/value The current study analyses the impact of financial restatement on auditor changes in a deep manner in a developing country like Iran.

Keywords

, Corporate governance, Audit firm size, Restatement, Auditor change
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@article{paperid:1065835,
author = {Eshaghnia, Azam and Salehi, Mahdi},
title = {The impact of financial restatement on auditor changes: Iranian evidence},
journal = {Asia Pacific Journal of Innovation and Entrepreneurship},
year = {2017},
volume = {11},
number = {3},
month = {December},
issn = {2071-1395},
pages = {366--390},
numpages = {24},
keywords = {Corporate governance; Audit firm size; Restatement; Auditor change},
}

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%0 Journal Article
%T The impact of financial restatement on auditor changes: Iranian evidence
%A Eshaghnia, Azam
%A Salehi, Mahdi
%J Asia Pacific Journal of Innovation and Entrepreneurship
%@ 2071-1395
%D 2017

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