Title of article :
The Effect of Company’s Business Strategy on Audit Fee and Auditor’s Opinion according to Competition Theory (Empirical Evidence from Tehran Stock Exchange)
Author/Authors :
Mahdavi Sabet ، Elahe School of Management and Economics - Islamic Azad University, Science and Research Branch , Vakilifard ، Hamidreza School of Management and Economics - Islamic Azad University, Science and Research Branch , yaghobnezhad ، Ahmad School of Management and Economics - Islamic Azad University, Central Tehran Branch , Banimahd ، Bahman School of Management and Economics - Islamic Azad University, Karaj Branch
Abstract :
The present research studied the effect of prospective business strategy on audit fee and auditor’s opinion according to competition theory and risk-based auditing theory. It investigated whether audit fee and independent auditor’s opinion are affected by the client’s business strategy. The statistical population included firms listed in Tehran Stock Exchange, out of which 75, from period 2010-2018, were selected as the sample. To conduct statistical analyses, multiple linear regression with least squares (LS) method with panel-fixed effects approach, and binary logistic regression were used. Data analysis showed that the artificial variable “prospective business strategy” has a positive, significant relationship with dependent variables “audit fee” and “auditor’s modified opinion”. It can be thus concluded that audit fee and the probability of issuing a modified audit opinion are greater in clients with prospective business strategy. The research results provided, for the first time, evidence on the empirical relationship between client’s business strategy and audit fee and auditor’s opinion. Therefore, they can be exploited in legislations on auditing.
Keywords :
Prospective Business Strategy , Audit Fee , modified opinion , Competition Theory , risk , based auditing theory
Journal title :
International Journal of Finance and Managerial Accounting
Journal title :
International Journal of Finance and Managerial Accounting