Investor Sentiment, Misstatements, and Auditor Behavior

Subject Areas : Financial and Behavioral Researches in Accounting

Faegh  Ahmadi ¹ (استادیار گروه حسابداری و مدیریت مالی، واحد قشم، دانشگاه آزاد اسلامی، قشم، ایران)
amirhossein  jamali ² (Assistant Professor, Department of Accounting, Marvdasht Branch, Islamic Azad University, Marvdasht, Iran)
mohammad hadi  hosseini sarani ³ (Ph.D. Student of Accounting, Department of Accounting, Gheshm Branch, Islamic Azad University, Gheshm, Iran)

Received: 2022-01-25 Accepted : 2022-05-05 Published : 2022-08-23

Keywords: Misstatements, audit fees, Investor Sentiment, Auditor Behavior, Going Concern Opinion,

Abstract :

High investor sentiment has been linked with opportunistic managerial behavior in the face of more optimistic investors and analysts. In this study, this line of work is developed by documenting the increased likelihood of misstatements and the consequent increase in audit risk in the face of high investor sentiment. The main objective of this study is to investigate the effect investor sentiment on misstatements, and auditor behavior of listed companies in Tehran Stock Exchange. The sample consists of 94 firms listed in Tehran Stock Exchange in the period from 2017 to 2021. The research hypotheses were tested using multivariate regression model with panel data method. The results showed that investor sentiment have significant positive effect on the misstatements with in 95% confidence level. In addition, other findings indicated existence of a significant positive effect investor sentiment on audit fees and going concern opinion. As a result, The findings enhance the understanding of how investor sentiment affects misstatements, and auditor behavior, and enrich the literature on corporate auditor pricing and reporting decisions.