Examining the impact of management ability on the audit opinion regarding the continuity of activity with emphasis on the audit committee

Abstract

So far, there is extensive literature on the determinants of audit fees and the willingness of auditors to publish a report containing a going concern clause. However, most of the previous researches have focused on the determinants at the company level, and very little empirical evidence has been conducted regarding the effect of the owner's company's management characteristics on the audit opinion and the auditor's report. The aim of the current research, considering the existing research gap, is to investigate the impact of management ability on the audit opinion regarding the continuity of activity with an emphasis on the audit committee in companies admitted to the Tehran Stock Exchange and also to provide a suitable model to help managers of investment companies, analysts and in The end is the capital market. To conduct this research, a sample of 46 companies was selected from the companies admitted to the Tehran Stock Exchange. In this research, the impact of management's ability on the audit opinion regarding the continuity of activity was investigated with an emphasis on the audit committee for the period of 2010-2019, and a total of 460 observations are available for research. The statistical method used in this research is the logistic method. The results showed that 1- the ability of the managing director has a negative relationship with the type of auditor's negative opinion regarding the continuation of the company's activity. 2- The ability of the managing director to dismiss the auditor after issuing a negative opinion regarding the continuation of the activity is effective. And 3- The audit committee reduces the effect of the CEO's ability on the auditor's opinion regarding the continuity of the activity. The results of this research are useful for independent auditors, company boards, investors, legislators and other capital market stakeholders. Independent auditors can use the management ability measure to review their owners, assess their business risk, and make pricing decisions..