Social Ties Theory and Audit’s Opinion and Conditional Accounting Conservatism : Experimental Evidence of Tehran Stock Exchange

Subject Areas : Management Accounting

gholamali Movahedi Asl ¹ , mehdi moradzadeh fard ² , hamid ahmadzadeh ³

1 - Ph.D Student of Accounting , Islamic Azad University, Karaj Branch, Karaj, Iran
2 - Associate Professor of Accounting , Islamic Azad University, Karaj Branch, Karaj, Iran
3 - Assistant Professor of Accounting , Islamic Azad University, Karaj Branch, Karaj, Iran

Received: 2021-06-05 Accepted : 2021-06-05 Published : 2021-05-22

Keywords: Social ties, accounting conservatism, Audit Opinion,

Abstract :

This paper based on the theory of social ties investigate  the effect of the simultaneous statehood of the independent auditor and CEO of the company as well as the simultaneous change of the independent auditor and CEO of the company on auditor’s opinion and conditional accounting conservatism in 168 listed companies in Tehran stock exchange during the period 2010 to 2018. The research hypotheses were tested based on multiple linear regression method using conventional minimum squares with panel-constant effects approach, as well as binary-logistic regression method. The results of the research show that the simultaneous statehood of the CEO and the independent auditor has a positive and significant relationship with the issuance of a clean opinion by the independent auditor. Also, the simultaneous statehood of the CEO and the independent auditor increases the conservatism of accounting. On the other hand, the simultaneous change of the CEO and the independent auditor has a significant and negative relationship with the issuance of a clean opinion by the independent auditor. But the simultaneous change of CEO and independent auditor does not have a significant effect on accounting conservatism.

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