Basis for Modified Auditor's Opinion and Earning Management

Document Type : Original Article

Authors

1 Assistant Professor of Accounting, Ferdowsi University of Mashhad, Mashhad, Iran.

2 PhD student of Accounting, Ferdowsi University of Mashhad, Iran.

10.22034/iaar.2020.107122

Abstract

Audit opinion, usually in the form of qualified and unqualified, placed into research models. However, the nature and consequences of the Basis for Modified Opinion is different. The aim of this study is to answer the question of whether the results considering the nature of the provisions before the auditor's opinion on research models, with results taking into account the opinion alone is different. The relationship between earning management and audit opinion, between earning management and Basis for Modified Opinion in separation of nature with using panel models and generalized Poisson information from 142 listed companies in Tehran Stock Exchange (TSE) from 2008- 2015 were tested. Results indicate that the relation between earning management and type of audit opinion is only significant meaningful in one out of five earning management models. However there is significant relationship between earning management and number of paragraphs of material misstatement, ervasive limitation on the Scope of the Audit uncertainty, in four, two and one models out of five earning management models respectively.

Keywords

Accounting and Auditing Research
Volume 12, Issue 45
April 2020
Pages 23-40

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