Investigating the effect of economic uncertainty on the relationship between comparability of financial statements and the stock price crash riskon Tehran Stock Exchange

Subject Areas : Financial Markets and Institutions

Zoheyr Alipourzadeh ¹ , Alireza Ghanbarzade ² , Mohammad Abbedi ³ , Arezo Jabari ⁴

1 - Department of Accounting, Khoramshar-Persian Gulf International Branch, Islamic Azad University, Khoramshar, Iran
2 - Department of Accounting, Khoramshar-Persian Gulf International Branch, Islamic Azad University, Khoramshar, Iran.
3 - Department of Accounting, Khoramshar-Persian Gulf International Branch, Islamic Azad University, Khoramshar, Iran
4 - Department of Accounting, Khoramshar-Persian Gulf International Branch, Islamic Azad University, Khoramshar, Iran

Received: 2021-04-28 Accepted : 2021-12-01 Published : 2021-11-22

Keywords: audit fees, Management Transactions, Annual Profit Fluctuations,

Abstract :

When auditors see an abnormal fluctuation in profit over the previous year, they will perceive it as an audit risk. Therefore, in their response to the perceived risk, there will be more effort and attention. They increase their audits to the same level, and this affects the audit fee. Management transactions, on the other hand, are part of the transactions with affiliates that companies make with the main managers of the business unit or their close relatives. So far, it has received less attention in the research literature and can affect the relationship between profit fluctuations and audit fees. Therefore, the present study aimed to investigate the effect of management transactions on the relationship between annual earnings fluctuations and audit fees in companies listed on the Tehran Stock Exchange. EViews statistical software was used for statistical analysis.  In this research, 150 companies (1050 years of company) were selected to test the research hypotheses between 2013 and 2020.To test the research hypotheses with data consolidated from multiple linear, regression analyzes were used. In general, the summary of the results of testing the research hypotheses show that annual profit fluctuations have a significant positive effect on the audit fees of companies listed on  Tehran Stock Exchange. The results also show that managerial transactions increase the positive relationship between annual earnings fluctuations and audit fees of companies listed on the Tehran Stock Exchange.

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