Asian Review of Accounting, Volume (28), No (3), Year (2020-6)

Title : ( Auditors’ response to readability of financial statement notes )

Authors: Mahdi Salehi , Mahmoud Lari Dashtbayaz , Shaban Mohammadi , Mohammad Sadegh Adibian , Seyed Hamed Fahimifard ,

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Abstract

Purpose – The main objective of the present study is to assess the potential impact of readability of financial statement notes on the auditor’s report lag, audit fees and going concern opinion (GCO). Design/methodology/approach – The statistical population of this study includes all listed firms on the Tehran Stock Exchange (TSE) for the period of 2012–2017. The systematic elimination method is used for sampling and multiple regression and EViews software are used for testing the hypothesis models. Findings – The obtained results show that there is a significant and positive relationship between audit report lags and readability of financial statements. Moreover, it is also revealed that readability of financial statements is positively associated with audit fees. Furthermore, the findings suggest a negative correlation between readability indexes and issuing GCOs, denoting hard-to-read statements is considered as a risk factor by auditors. Finally, the observations of our robustness tests suggest that the association between audit report lag and readability of financial statements is robust. Originality/value – This is the first conducted investigation concerning auditor’s response to the readability of financial statement notes in TSE. The outcome of current paper may pave the way for revising and developing Iranian accounting standards in order to give a fairer and clearer picture of financial reports.

Keywords

, Auditor’s report lag, Readability of financial statement notes, Audit fees, Going concern opinion, Hard-to-read financial footnotes, Understandability of financial statements
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@article{paperid:1080441,
author = {Salehi, Mahdi and Lari Dashtbayaz, Mahmoud and شعبان محمدی and Adibian, Mohammad Sadegh and Fahimifard, Seyed Hamed},
title = {Auditors’ response to readability of financial statement notes},
journal = {Asian Review of Accounting},
year = {2020},
volume = {28},
number = {3},
month = {June},
issn = {1321-7348},
keywords = {Auditor’s report lag; Readability of financial statement notes; Audit fees; Going concern opinion; Hard-to-read financial footnotes; Understandability of financial statements},
}

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%0 Journal Article
%T Auditors’ response to readability of financial statement notes
%A Salehi, Mahdi
%A Lari Dashtbayaz, Mahmoud
%A شعبان محمدی
%A Adibian, Mohammad Sadegh
%A Fahimifard, Seyed Hamed
%J Asian Review of Accounting
%@ 1321-7348
%D 2020

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