Supervisory institutions, Oversight on External Auditors, Audit Quality and Financial Reporting Quality

Abstract

Generally external supervision activities lead improving audit quality. In Iran, different organizations have supervised auditing institutions. One of them is Securities and Exchange Organization (SEO). . In this paper, effectiveness of SEO supervision on registered auditing institutes is studied through investigating its effect on audit quality and financial reporting quality. For measuring audit quality and financial reporting quality, abnormal accruals and value relevance of companies, financial information are used. For achieving the study goal, two hypothesis were designed. The sample consists of 86 listed companies on Tehran Stock Exchange’s information during 2001 to 2015. The results show that SEO supervision activities has improved audit quality and financial reporting quality. Generally external supervision activities lead improving audit quality. In Iran, different organizations have supervised auditing institutions. One of them is Securities and Exchange Organization (SEO). . In this paper, effectiveness of SEO supervision on registered auditing institutes is studied through investigating its effect on audit quality and financial reporting quality

Keywords

• audit quality
• disclosure quality
• supervision