Journal of Accounting and Management Vision

Journal of Accounting and Management Vision

Investigating the Effect of Political Communication on the Quality of Audit Institutions, Taking Into Account the Moderating Role of Agency Fees in Companies Listed on the Tehran Stock Exchange

Document Type : Original Article

Author
Taghi Asadi
M.A. of Accounting , ShahreKord branch, Islamic Azad University, ShahreKord, Iran
Abstract
Firms with political connections enjoy several economic benefits, so they are less likely to choose high-quality auditors to hide earnings management and opportunistic behaviors. And on the other hand, managers, with the aim of gaining advantages for the company under their management, usually establish and maintain a relationship with the government, but in markets with weak regulatory frameworks, this relationship can lead to the representation problem and related costs.The purpose of this research is to investigate the effect of political connections on the quality of audit institutions, taking into account the moderating role of agency fees in companies listed on the Tehran Stock Exchange. Using regression analysis, the relationship between the aforementioned variables was investigated in 178 companies admitted to the Tehran Stock Exchange for the period 1396-1400. The results of the research show that there is a positive and significant relationship between the company's political connections and the selection of quality auditing firms, and agency costs intensify the direct relationship between the company's political connections and the selection of quality auditing firms.
Keywords
agency costs
political connections
quality audit firms

Subjects