The aim of this paper is to investigate the value relevance of the audit report, auditor type and auditor tenure in the Iranian context. This study evaluates the effects of various independent variables on the value relevance using a multiple regression analysis approach for 156 companies listed on the Tehran Stock Exchange (TSE) over a 10 year period. The results indicate that audit report has not the value relevance. Hence, unqualified audit report and other audit report are not different in capital market. Empirical results showed that the auditor type has a positive impact on the value relevance. This result is consistent prior studies. Thus, the value relevance of firms audited by government audit has more than firms audited by private audit. Also, when the tenure of auditors is long, it has a negative impact on the value relevance. This result is consistent prior studies. The empirical evidence indicates that audit ISSN 1946-052X 2013 www.macrothink.org/ajfa 90 report is not valued by the capital market in Iran and that audit privatization impact on the value relevance in capital market. Hence, the market regulators proposed that the more monitoring considered on audit quality to improve the value relevance in capital market. The results presented in the paper have important implications for both the auditing profession and regulators in Iran.
Asian Journal of Finance & Accounting
Accurate assessment of systematic risks in financial markets can lead to favorable capital allocation. Systematic tail risk is adverse events that, if they occur, can affect stock returns. Therefore, the purpose of this study is to investigate the effect of tail risk on excess stock returns. In the present study, two criteria of cumulative tail risk and combined tail covariance risk were used to measure tail risk. For this purpose, using the systematic removal method, a sample of 136 companies listed on the Tehran Stock Exchange (TSE) in the period 2009 to 2019 was selected. Research hypotheses were tested using the five-factor model of Fama and French regression. The results showed that the combination of size portfolio and tail risk and the combination of value portfolio and tail risk have a negative effect on excess stock returns. In addition, the results indicate that the combination of profitability portfolio and tail risk and the combination of investment portfolio and tail risk does not lead to excess stock returns. In general, the results showed that tail risk can be added to asset pricing models in addition to the variables of the five-factor model of Fama and French.
The current impressive increase in the number of the restatements, encourage many researchers to find the causes of restatements including earnings management. Moreover, restatements increase the uncertainties of investors about earnings and decrease its information content. Therefore, the purpose of this research is to investigate the relationship between earnings management and earnings restatements. In addition, this paper examines the information content of earnings and cash flow following restatements period. For this purpose, we use one logistic regression and three multiple regressions with OLS method over the period 2001-2011. The results indicate that there was no significant relationship between discretionary accruals and earnings restatement, but magnitude of the discretionary accruals as the proxy of earnings management was significant and positively associated with the earnings restatement. Moreover, the earnings had more information content than cash flow before and after the earnings restatement. The overall result suggests that the one reason for earnings restatement is to make earnings management in an emerging market.
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