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Impact of normal and abnormal audit fees on accruals with emphasis on good accruals and accrual estimation error
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Mohsen Salehinia   , Parvin Hoseini * |
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Abstract: (1326 Views) |
Audit fees are an important factor in the audit quality and therefore in the financial reporting quality. The purpose of the present study is to investigate the impact of auditor's normal and abnormal fees on the accrual reversal (in two form named good accruals and accrual estimation errors). In this study, we have used the approach of Lin et al. (2018) to separate auditor's fees into two parts of normal and abnormal fees, and the Allen et al.'s (2013) model is used to separate the accruals into two components of good accruals and accrual estimation error. In order to test the hypotheses, 82 firm that active in Tehran Stock Exchange during the period 1391-1396 were selected as sample and analyzed using panel data method. The hypothesis testing method is multivariate regression with generalized least squares estimation (GLS). The results of the statistical tests confirm that the auditor's normal fees has a positive and significant effect on the good accrual component, while the effect of the normal fees on the accrual estimation error is not significant. The results also showed that the auditor's abnormal fees has a significant negative effect on the accrual estimation error, but the effect of the abnormal auditor's fees on the good accruals is not significant.
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Article number: 13 |
| Keywords: accrual reversal, normal audit fees, abnormal audit fees, accrual estimation error, good accrual |
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Full-Text [PDF 489 kb]
(358 Downloads)
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Type of Study: Research |
Subject:
Auditing
Received: 2019/10/12 | Accepted: 2020/02/1 | Published: 2022/01/2
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