mohamad reaza abbaszadeh; Mahdi Salehi; farhad nasimtoosi
Abstract
Readability is the ease with which a reader can understand a written text. Audit report is a message about validity of financial statements that auditors transmit to the users. It is expected that the readability of the audit report plays an important role in understanding it by users. Therefore, the ...
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Readability is the ease with which a reader can understand a written text. Audit report is a message about validity of financial statements that auditors transmit to the users. It is expected that the readability of the audit report plays an important role in understanding it by users. Therefore, the present paper aims to examine the factors affecting on readability of the audit report. To this end, the readability of 1202 audit reports belong to 2011 to 2016 (after revision in the Audit Standard 700 on 2011), using Gunning Fog Index is measured, Then the impact of the auditor's characteristics and Client's characteristics on Audit report Readability by Fuzzy Decision Tree, Ancova And step-by-step regression is studied. The results showed that, firstly, the readability of the audit reports varies with each other. Secondly, the readability of the audit reports is influenced by the auditor's characteristics and Client's characteristics. Third, most important variables determining readability of the audit report are the Auditor's Size (negative effect), auditing consolidted/not consolidted financial Statement (Consolidated one is less readable), size of the Client (negative effect), ratio of market to book value of Client (Positive effect) and Auditor's Report Type (adjusted report is less Readable). Fourth, audit report delay will reduce readability.
Reza Hesarzadeh; Hossein Etemadi; Adel Azar; Ali Rahmani
Abstract
According to the information perspectives of accounting, the main function of accounting is to provide information and to reduce uncertainty. Therefore, accounting capacity of reducing uncertainty determines the accounting quality (AQ) and so, we are attempting to find the best combinations ...
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According to the information perspectives of accounting, the main function of accounting is to provide information and to reduce uncertainty. Therefore, accounting capacity of reducing uncertainty determines the accounting quality (AQ) and so, we are attempting to find the best combinations of AQ Proxies whose trading off can reduce uncertainty. The purpose of this paper is to explore how AQ Proxies could reduce uncertainty. Tree analysis (structures of if and then) is employed since this analysis could empirically address boththe trade-off of Proxies and the importance of each measure in reducing uncertainty. Also, traditional statistics tests are employed. The Decision Tree analysis creates a tree-based classification model. Our findings suggest that there are at least three interaction paths through which accounting quality Proxies could reduce uncertainty. In contrast to previous researches which have found it difficult to investigate the trade-offs of AQ Proxies; this paper shows that it is possible to address it and in this way, it could prepare a number ofrules of thumb to reduce uncertainty through AQ Proxies. These findings have different implications for policy makers, audit committees, and investors.