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An Investigation of effective factors in estimating the probability of the auditor's failure to provide a opinion
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Mahdiyeh Esfahani *   , Hossein Fakhari , Jamal Ghasemi |
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Abstract: (741 Views) |
Abstract:
The liberation of the auditing market in Iran and increasing the variety of services provided by the auditing profession have highlighted the role of regulatory authorities on the professional performance of auditors when compared to the past. In a way that auditors are convicted of negligence, fraud, and failure if they neglect or fail to perform their professional responsibilities. As a result, it is important for users of financial statements, especially regulator, to identify and estimate the likelihood of these events occurring.With regard to this priority, The present study, focusing on the subject of the auditor’s failure in express their correct opinion, seeks to identify the factors influencing the likelihood of this event, which they may be imposed on the audit process by the auditor, the client, and the environment. To this aim, based on the disciplinary cases recognize by the Society of Certified Public Accountants of Iran against auditing firms, the data of 35 auditing firms that they provide incorrect opinin and the data of 110 auditing firms that they provide correct opinin including auditor by failure and auditor non -failure during the years 2006-2018 is gathered and analyzed in cross-sectional by using a logistic regression method. Findings show that among the personal factors related to the auditor, revenue and grade of quality control and among the factors related to the client, the quality of accruals and the financial specialization of audit committee, size and profitability index (ROA) and among the environmental factors, audit risk of error1 and error2, and audit tenure are the most important determinants of the probability of the auditorchr('39')s failure. These findings can be useful for regulators, investors, auditing firms, and Certified Public Accountants in order to identify the firms with the problem of failure, and for establishing policies, policy-making, and business planning. |
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| Keywords: Failure, Auditor, Opinion, Judjment and Decision making |
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Full-Text [PDF 696 kb]
(405 Downloads)
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Type of Study: Research |
Subject:
Auditing
Received: 2021/05/19 | Accepted: 2021/07/10 | Published: 2022/09/1
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