Investigating the Relationship Between Audit Quality and Creative Accounting Strategy Using Dynamic Models

Subject Areas : Creativity and innovation from psychological, epistemological, educational and pedagogical

Akram Taftiyan ¹

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Received: 2025-02-27 Accepted : 2025-06-09 Published : 2025-02-24

Keywords: Creative Accounting Strategy, Audit Quality, Dynamic Models.,

Abstract :

The purpose of implementing creative accounting is to show the financial position desired by the company's management. Creative accounting can be used to manipulate financial information from its correct and accurate form by exploiting existing rules or, in many cases, ignoring one or more rules. The purpose of the present study is to examine the effect of audit quality on creative accounting strategy. The dependent variable of the research on creative accounting strategy is the independent variable of audit quality, the criteria of which are the size of the audit firm, the type of auditor, the auditor's opinion, and the auditor's expertise in the industry. For this purpose, 178 companies listed on the Tehran Stock Exchange between 2013 and 2023 were selected by systematic elimination method, and in order to increase the degree of confidence in the results of hypothesis testing, the advanced method of generalized moments (GMM) was used. According to the research findings, there is a positive and significant relationship between audit quality criteria (type of auditor, size of the audit firm, the auditor's opinion, and the auditor's expertise in the industry) and creative accounting strategy in GMM. This research adds valuable insights to the existing literature on the implications of audit quality on creative accounting strategy and helps managers and audit firms in the country to develop a new approach in designing and explaining the determinants of creative accounting.

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