Investigating the Effect of Audit Quality on Over-investment Using Measures of Auditor Specialty and Audit Tenure for Listed Companies in Tehran Stock Exchange

Mahmoud Moeinadin (), Jamal Barzagari Khaneghah () and Jamal Tabatabaei Mazraehno ()
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Mahmoud Moeinadin: Islamic Azad University
Jamal Barzagari Khaneghah: Islamic Azad University
Jamal Tabatabaei Mazraehno: Islamic Azad University

International Journal of Academic Research in Accounting, Finance and Management Sciences, 2013, vol. 3, issue 4, 229-244

Abstract: The main objective of this study was to investigate the effects of audit quality on over-investment in listed companies in Tehran Stock Exchange. In order to measure audit quality, two variables, namely auditor tenure and auditor expertise were used. The study population comprised three selected industries: cement, basic metals and automotive parts; after determining the sample through selection method, the data was collected for the period between 2009 and 2012. In order to analyze and test the hypotheses, linear regression and logit regression was performed in Eviews (version 7.1) and SPSS (version 20). Using logit regression, results showed that there is a significant inverse relationship between auditor specialization and over-investment. Studying the audit quality in tenures, it was also found that there is no significant relationship between over-investment in long term period and medium tenure in any of the logit or linear regression models; however, using logit regression, there was found a positive significant relationship in short term period.

Keywords: Audit quality; auditor specialization; audit tenure; investment decisions; over-investment (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:hur:ijaraf:v:3:y:2013:i:4:p:229-244

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