Political Connections and Auditor Switching: Evidences of Private Audit Firms

Document Type : Original Article

Authors
1 Assistant Professor of Accounting Department at Karaj Islamic Azad University
2 Associate Professor of Accounting Department at Allameh Tabatabaei University
3 Ph.D Student of Accounting at the Islamic Azad University- Tehran Research and Science Branch
Abstract
This study investigate relation between political connections and auditor switching in the listed firms of Tehran Stock Exchange (TSE) during a 10-year period from 2003-2012. Using correlation method and binary logistic regression, the results of this study show that there is a positive relation between political connections and profitability with auditor switching. Evidence of the study also show that  earnings management, audit fees, management change, leverage ratio, type of auditor report at the previous year and firm size don’t have a significant relation with auditor switching. So, research evidence claim that Iranian audit market has influenced by political issues.
Keywords