Study auditors' reaction to the renewal of financial statements of companies admitted to the Tehran Stock Exchange

Abstract

The purpose of this study was to investigate how auditors react to the renewal of financial statements of companies admitted to the Tehran Stock Exchange. For this purpose, the impact of the resubmission of financial statements and the year after the resubmission of financial statements on three audit inputs, including audit fees, the number of professional employees of the audit firm, and the number of partners signing the audit report, was investigated as part of auditors' response to an external event. The present study was conducted with a descriptive correlation approach based on multivariate regression analysis. The statistical sample consisted of 143 companies admitted to the Tehran Stock Exchange from 2014 to 2022. After collecting the data from the Codal website and the website of the official Accountants Society, econometric techniques and EViews software were used to analyses the data. The results of the study showed that the audit fees and the number of professional employees of the audit institute contracting with the company increase in the year when the financial statements are renewed. It was also found that the increase in these audit entries continues in the year after the renewal of financial statements. However, the findings show that auditors do not change the signatory partners of the audit report in response to the restatement of financial statements.