Accounting and Auditing Studies

Accounting and Auditing Studies

Investigating the effect of regulations requiring fees of audit services based (IACPA) on discretionary accruals-based earnings management companies listed in Tehran Stock Exchange

Document Type : Original Article

Authors
Reza Jamei 1
Kaveh Nosrati 2
1 Faculty Member University of Kurdistan(UOK), Iranian Certified Public Accountant (ICPA), Iran
2 Master of Accounting, University of Kurdistan, Iran
Abstract
The main objective of this study was to investigate the effect of regulations of the base fees of audit services (Iranian Association of Certified Public Accountants) on discretionary accruals-based earnings management of listed companies in Tehran Stock Exchange. The sample period undertaken for this study is a period of seven years from 2010 to 2016 and include 59 listed companies in Tehran Stock Exchange. It also includes observation and investigation of 413 firms during that period. To test the hypothesis, the statistical models such as multivariate linear regression model and panel data with fixed effects model were used. The results of statistical models show that, the base fees regulations of audit services have a significant negative impact on absolute discretionary accruals-based earnings management and has positive discretionary accruals and causes to decrease. The findings also show that, Negative discretionary accruals-based earnings management will not be reduced in the period after mandatory of regulations. Moreover, this things do not causes to reduce the discretionary accruals-based earnings management firms that pay higher audit fees.
Keywords
Regulations audit fees
earnings management
discretionary accruals
Iranian Association of Certified Public Accountants
Accounting and Auditing Studies
Volume 8, Issue 30
Summer 2019
Pages 75-90