Presenting a Structural Equation Model for Effects of Auditor Independence on Audit Quality from Managers’ Perspective of Companies in Tehran Stock Exchange

Mohammad Ali Aghaei, Iman Ranjbar


Audit through validating the financial statements, reduces information asymmetry which exist between managers and shareholders. Due to two reason expected, there is a positive relationship between the amount of discretionary accruals and the inherent risks of accounting. First, assuming managerial opportunism, accruals is a tool of management to manage reported earnings and managers manipulate accruals to their advantage second, accruals, which are difficult to audit associated with most risk accounts such receivable and inventories. It is thought that the level of audit quality is confirmed by the economic environment, it is vital to the continuation of a long-term auditing and the future of the audit profession has considerable depends on quality of output audit process. Therefore, in this study we have tried to provide a structural equation model to examine the effect of auditor independence on audit quality. After the initial questionnaire was distributed and confirmed the validity and reliability of standardized research, the standard deviation of the results of the questionnaire showed that most of the population standard deviation is equal to 0.318. Thus, according to the obtained standard deviation, maximum sample size is estimated at 5% error level is equal to 95 after the 130 questionnaires distributed, 107 completed questionnaires were collected. Thus, the statistical analysis in this study was based on 107 questionnaires. Structural equation modeling, the method has been used to design the research model. By comparing the values of obtained fitness criteria with acceptable range, the results showed that all the parameters values were deemed desirable. So the final version was approved and the main hypothesis that the impact of auditor’s independence on audit quality is approved. As the impact of that in the non-standard mode is equal to 0.58 and in the standard mode is equal to 0.32.

DOI: 10.5901/mjss.2016.v7n2s2p78

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Mediterranean Journal of Social Sciences ISSN 2039-9340(Print) ISSN 2039-2117(Online)

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