The Impact of Political Communication on the Risk of Litigation Against the Auditor Taking into Account the Role of Audit Quality
الموضوعات :
Zeinab Roknabadi
1
(Master of Accounting, Department of Accounting, Payame Noor University, Tehran, Iran.)
Abdolkarim Moghaddam
2
(Associate Professor, Department of Accounting, Payame Noor University, Tehran, Iran.)
الکلمات المفتاحية: Political communication, Audit claims, Audit quality, Auditor expertise.,
ملخص المقالة :
Objectives: The present study aims to investigate the impact of political communication on the risk of lawsuits against auditors, considering the role of audit quality.
Design/methodology/approach: This research is applied and, from a methodological standpoint, is causal correlation. The statistical population of the study consisted of all firms listed on the Tehran Stock Exchange. Using systematic sampling, 131 firms were selected as the study sample and studied over a 7-year period from 2016 to 2022.
Results: The results of testing the research hypotheses showed a relationship between political communication and the risk of lawsuits against auditors in the first hypothesis. The second hypothesis demonstrated the effect of the interaction of audit quality and political communication on lawsuits against auditors.
Innovation: This ongoing research provides evidence that political communication reduces the risk of lawsuits against auditors and improves the quality of auditing.
Baghoumiyan, Rafik; Rajab Dorri, Hossein (2019) The relationship between the level of information technology and the risk of lawsuits against auditor. 17th Iranian Accounting Congress. Campus University of Qom. Page 20-1.
Biddle, G, Gilles, H. & Verdi, R. (2009). How does financial reporting quality relate to investment efficiency? Journal of Accounting and Economics, Volume48.
Boubakri, N. Guedhami, O. Mishra, D. Saffar, W. (2012). Political connections and the cost of equity capital. Journal of Corporate Finance, 18 (3): 541–559..
DAeMeyst, DJ Lowe, M Peecher)2020(PRACTITIONER SUMMARY Factors Affecting the Outcomes of Legal Claims against AuditorsFactors Affecting the Outcomes of Legal Claims against Auditors Issues in Auditing - meridian.allenpress.com.
DeAngelo, L. (1981). Auditor Independence, 'Low Balling,' and Disclosure Regulation. Journal of Accounting &Economics; 3:113-127.
Dolabi, Najmeh (2019) The role of risk on the relationship between auditor size and audit quality in companies listed in Tehran Stock Exchange, Journal of New Research Approaches in Management and Accounting, Vol. 3, No. 14, pp. 32-50. (in Persian).
Ebrahimi Kordlar, Ali; Javani Ghalandari, Mousa (2016) The Impact of Auditor's Expertise on Earnings Quality and Simultaneously Stock Prices. Journal of Accounting and Auditing Reviews. Faculty of Management, University of Tehran. Vol. 3, No. 2, pp. 137-154. (in Persian).
Etemadi, H.; Abdoli, L. (2017) Audit quality and fraud in financial statements. Financial Accounting Knowledge, Volume (4), Issue (4), Serial (15). pp. 23-43.
Foroughi, D., Amiri, H., Mirzaei, M., (2011) The effect of lack of transparency of financial information on the risk of future stock price crash in the listed companies. Journal of Financial Accounting Research, 3rd Year, No. 4.
Jabbar Zadeh Kangarlouie, Saeed; Sabzevari, S.; Motavasel, M. (2014) Investigating the Relationship between Audit Quality and Litigation against Auditor in Tehran Stock Exchange. Audit Knowledge. Vol. 14, No. 56, pp. 69-86. (in Persian).
Jonathan Hucke (2020)The Role of Audit Firms in Fraud Detection Against the Backdrop of Potential Conflicts of Interest BACHELOR’S THESIS September 2020 Bachelor of Business Administration International Business.pp1-90
Khajavi, Shokrallah; Nasirifar, Hashem; Ghadirian Arani, Mohammad Hossein (1400) Political communication and accounting information quality: Evidence from financial statement renewal. Empirical studies of financial accounting. Volume (18), Issue (71), pp. 1-18.
Khaksar, J., Salehi, M. and Lari DashtBayaz, M. (2021), "The relationship between auditor characteristics and fraud detection", Journal of Facilities Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JFM-02-2021-0024
Khalifeh Soltani, S.A.; Rahnama, M., Koyasi, F., (2018) The Effect of Political Communication on the Risk of Stock Price Collapse under Information Asymmetry Conditions of Survey Knowledge Journal, Vol. 9, No. 4, pp. 1-20.
Khalil, S. and Nehme, R. (2021), "Performance evaluations and junior auditors’ attitude to audit behavior: a gender and culture comparative study", Meditari Accountancy Research, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/MEDAR-04-2021-1285
Krishnan, G.V. Wang, C. 2015. The relation between managerial ability, and audit fees and going concern opinion. Audit.: J. Pract. Th
Li, Guoping, and Zhou, Hong. (2015). “Political connections and access to IPO markets in China, China Economic Review”, 33, 76–93.
Ling, Leng, Zhou, Xiaorong, Liang, Quanxi, Song, Pingping, and Zeng, Haijian. (2016). “Political connections, overinvestments and firm performance: Evidence from Chinese listed real estate firms”. Finance Research Letters, 1–6.
Maaloul, A. Chakroun, R. Yahyaoui, S. (2018). The effect of political connections on companies’ performance and value: Evidence from Tunisian companies after the revolution. Journal of Accounting in Emerging Economies, 8 (2), 185-204
Mahdi Fard, Mohammad Reza, Royaei, Ramezan Ali, (2015) Political management and stock prices of listed companies in the stock exchange: Testing of Political Economy Theory, Financial Knowledge of Securities Analysis, Vol. 8, No. 11.
Mehravar, M.; Kargar, H. (2019) The moderating role of financial reporting quality on the relationship between political communication and risk of future stock price decline. 17th Iranian Accounting Congress. Pardis Qom.
Nikoomaram, Hashem; Banimahd, Bahman; Rahnama Roodpushti, Fereydoun; Kiaie, Ali (2013) Economy based on relations, political relations and accruals quality. Audit Knowledge, Vol. (13), No. (50), pp. 1-17. (in Persian).
Nonahalfar, Ali Akbar; Rahmani Noujeh Deh, Hosein; Nasiri, Zahra (2020) Investigating the Relationship between Political Communications and Corporate Financial Crisis and Audit Fees. Accounting and Management Outlook. Year (3), No. (30), pp. 68-82. (in Persian).
Rahnama Roodposhti, Fereydoun, Mohseni, Abdolreza; (2018) Political Communication, Cash Dividends and Return on Shares in Companies Listed in Tehran Stock Exchange. Quarterly Journal of Securities Analysis, Vol . 11, No . 38
Wang, Z. H. Chen, M.H. Chin, C.H. Zhang, Q. (2017). Managerial ability, political connections, and fraudulent financial reporting in China. Journal of Accounting and Public Policy, 36 (2), 162-141.
Yangyang, F. Chan, L. Nandu, N. Jared, S. (2015). Auditor Litigation, Audit Office Pricing and Client Acceptance. Texas A&M University, 2015 Mid-year Auditing Conference.
Yuan, Q. and Y. Zhang, (2016), The real effects of corporate fraud: evidence from classaction lawsuits, Accounting and Finance 56, 879–911.
Zhi Wang a, Mei-Hui Chen b,⇑, Chen Lung Chin c, Qi Zheng(2017) Managerial ability, political connections, and fraudulent financial reporting in China J. Account. Public Policy xxx (2017) xxx–
