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Investigation of Informational Role of Auditor Industry Expertise on the Relationship between Earnings Quality and Information Asymmetry
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Atieh Khasheh   , Fatah Behzadian * |
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Abstract: (113 Views) |
The high quality of profit makes investors eager to make more investments. When investors are sure that the quality of the company's profit is high, they invest more in securities. One of the potential consequences of profit quality is the effect of information asymmetry. Information asymmetry increases the risk of incorrect selection and as a result reduces liquidity in financial markets, and its relationship with the quality of profit is important for financial analysts, investors and other people. The main purpose of this research is to investigate the informational role of auditor industry expertise on the relationship between profit quality and information asymmetry. The statistical population of this research is the companies accepted in the Tehran Stock Exchange and its statistical sample includes the data of 105 companies for the 5-year period of 2016-2019. The sampling method was systematic elimination method. The method used to estimate the model is the multivariate regression method using the combined data method. The research results showed that profit quality has a negative and significant effect on information asymmetry. Also, the results showed that the audit partner's industry expertise strengthens the negative and significant effect of profit quality on information asymmetry. Other results showed that the audit firm's industry expertise strengthens the negative and significant effect of earnings quality on information asymmetry. According to the results obtained from the research, investors and financial analysts are suggested to pay attention to the professional judgment of the institutions at the macro level as well as the professional judgment of the audit partner.
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| Keywords: Auditor Industry Expertise, Audit Partner's Industry Expertise, Earnings Quality, Information Asymmetry. |
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Full-Text [PDF 970 kb]
(58 Downloads)
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Type of Study: Research |
Subject:
Auditing
Received: 2023/06/11 | Accepted: 2024/04/18 | Published: 2024/11/30
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