Business, Management and Accounting
3 years ago

Audit quality impacts investors' decisions and strengthens security mispricing.

1 view
Accounting and Auditing Research
The Review of the Effect of Audit Quality Informational Consequences on the Investors' Decisions with Emphasis on Audit Partners' Switches
Mehrdad Kheirkhah, Mehran Aghaei, Esa Nouranifar

Paper Summary

The study looked at how changing audit partners affects investors' decisions. They analyzed data from 99 companies on the Tehran Stock Exchange over 5 years. The results showed that when audit quality improved due to a change in audit partners, investors reacted positively. This led to higher relevance of corporate profit, stronger security mispricing, and significant relationships with corporate debt contracts.

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