Earnings Quality: Some Evidence on the Role of Auditor Tenure and Auditors’ Industry Expertise

Document Type : Original Article

Authors
1 Associate Professor, University of Alzahra, Iran
2 Ph.D student of Accounting, University of Alzahra, Iran
Abstract
Prior studies suggest that auditor tenure are associated with earnings quality. In this study, we examine whether industry specialization of auditors affects the association between auditor tenure and earnings quality. By investigation of 68 listed companies, in 1381 until 1389 years, We find that the tenure is increasing, the absolute value of discretionary accrualsare increasing and the earnings quality is decreasing. While for firms audited by industry specialists, the tenure is increasing the earnings quality is increasing. These findings show that long term relationship between company and its auditor is not necessarily worrying.
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