Abnormal audit fees and future restatements: evidence from Tehran Stock Exchange

Mahdi Salehi, Shayan Farhangdoust and Adineh Vahidnia

International Journal of Accounting, Auditing and Performance Evaluation, 2017, vol. 13, issue 1, 42-64

Abstract: The aim of this paper is to provide empirical evidence for the impact of abnormal audit fees on future restatements. We examine whether firms that restate their financial statements have higher levels of total audit fees than their counterparts. In this regard, the authors test their hypothesis by performing panel data analysis on a sample of 936 firm-year observations from companies listed on the Tehran Stock Exchange during 2009-2014. We find that there is a negative relationship between the two; specifically, abnormal audit fees are lower in the periods leading up to the occurrence or announcement of the restatement (i.e., the next fiscal year).

Keywords: abnormal audit fees; ABEFEE; financial restatements; financial reporting; audit quality; auditing; abnormal fees; financial statements; Iran. (search for similar items in EconPapers)
Date: 2017
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