The effect of transactions with dependents on the auditor's inability to detect corporate fraud using auditor level analysis

Abstract

The main purpose of this study was to investigate the effect of transactions with individuals related to the auditor's inability to detect corporate fraud using the analysis of auditors in companies listed on the Tehran Stock Exchange. In order to collect research literature, library method and taking notes were used. The method of this research was descriptive and based on composite data and regression statistical method was used to examine the relationship between independent and dependent variables. The statistical population of this study was the companies listed on the Tehran Stock Exchange in the period from 2009 to 2018. Using elimination screening sampling method, 97 companies were studied as a statistical sample size.Data were analyzed and processed using Eviews9 software and statistical tests (logistic regression). The findings of this study showed that in companies with high transactions with affiliates, the probability of fines (inability) of the auditor is high. In other words, transactions with related parties increase the likelihood of the auditor's inability (audit failure due to fraud in the company).

Keywords

• information complexity
• auditor inability
• fraud detection
• transactions with related parties