Effect of Auditors' Characteristics on Relationship between Geographical Diversification and Real Earnings Management

Abstract

the study investigates the effect of auditors' characteristics on the relationship between geographical diversification and real earnings management in the listed companies on the Tehran Stock Exchange. Thus, 204 companies listed in Tehran Stock Exchange were systematically selected between 2012- 2017, and the data were analysed using SPSS 24. This research is applied, and in terms of nature, it is an ex-post-facto research, namely, it is based on past (corporate financial statements) analysis. In this study, examining the positive relationships between geographical diversification and real earnings management were shown, respectively. By measuring the effect of auditor’s specialisation on the relationship between geographical diversity and real earnings management, the auditor's expertise's impact has been considered significant, and the second hypothesis was confirmed.

Keywords

• auditor characteristics
• geographical diversification
• real earnings management