Document Type : Research Paper
Authors
1 Associated Professor, Department of Accounting, Allameh Tabataba'i University, Tehran, Iran
2 PhD Student, Department of Accounting, Allameh Tabataba'i University, Tehran, Iran
Abstract
This research aims to investigate the role of independent auditors and audit committees (AC) in mitigating the fraud risks. Prior studies have showed that all auditors or audit committees are not equally adept at identifying and reducing fraud risks by using non-financial measures (NFMs). This study’s research population covers the corporates listed on Tehran Security Exchange in 2014-2018. Hypotheses were tested using logistic regressions. Findings indicate some significantly negative relationships between auditor efforts, auditor tenure, AC chairs, auditor and AC chair expertise with fraud risks. Also, no significant relationship was found between expertise of AC chairs and fraud risk likelihood. The results indicate that audit processes can mitigate fraud risks, however, not all types of AC expertise can be helpful.
Keywords
بهرامی، آسو؛ نوروش، ایرج؛ راد، عباس و محمدی ملقرنی، عطاالله(1399). پیشبینی کشف تقلب در صورتهای مالی شرکتهای پذیرفته شده در بورس اوراق بهادار تهران. مطالعات تجربی حسابداری مالی. 16 (65). 35-59.
پوریانسب، امیر(1384). ساختار جامع برای کمک به تحلیل، کشف و پیشگیری تقلب. حسابدار رسمی 3(7). 27-36.
خداداده شاملو، ناصر؛ بادآور نهندی، یونس(1396). تأثیر تخصص حسابرس در صنعت و دورۀ تصدی حسابرس بر قابلیت مقایسۀ صورتهای مالی با تأکید بر چرخۀ عمر شرکت. پژوهشهای حسابداری مالی. 105-127.
خراسانی، ابوطالب (1397). بررسی آثار بکارگیری استانداردهای حسابرسی در افشای اطلاعات در گزارشگری مالی متقلبانه. رساله دکتری حسابداری دانشگاه علامه طباطبائی.
شیخ، محمد جواد (1383). بررسی اهمیت شاخصهای تقلب بالقوه مالی با استفاده از تکنیک تحلیل عاملی در شرکتهای ایرانی. رساله دکتری حسابداری دانشگاه تهران.
صفرزاده، محمد حسین؛ ممحمدی، عرقان (۱۳۹۸). اثر ویژگیهای کمیته حسابرسی بر رابطه بین پیچیدگی حسابرسی و تاخیر در گزارش حسابرس. مطالعات تجربی حسابداری مالی، سال ۱۶، شماره ۶۳، صص ۴۵-۶۷.
کمیته تدوین استانداردهای حسابرسی سازمان حسابرسی، (1394). مسئولیت حسابرس در ارتباط با تقلب و اشتباه، در حسابرسی صورتهای مالی، (استاندارد حسابرسی 240) تهران.
میرفندرسکی، سید محمد تقی؛ قادری، بهمن؛ آخوندی، مجید (1397)، رابطهی بین دوره تصدی حسابرس و خطر تقلب در گزارشگری مالی با کنترل اثر شرایط نااطمینانی محیطی. حسابدار رسمی، 43. 56-65.
نادریان، محمد رضا؛ صفار، محمد جواد (1380). مسئولیت حسابرسان در قبال تقلب. حسابرس ۳ (13).46-54.
Abbott, L., S. Parker, and G. Peters. 2004. Audit committee characteristics and restatements. Auditing: A Journal of Practice & Theory 23 (1): 69–88.
Beasley, M. 1996. An empirical analysis of the relation between board of director composition and financial statement fraud. The Accounting Review 71 (4): 443–465.
Beasley, M., J. Carcello, D. Hermanson, and T. Neal. 2009. The audit committee oversight process. Contemporary Accounting Research 26 (1): 65-122.
Behn, B. K., and R. A. Riley, Jr. 1999. Using nonfinancial information to predict financial performance: the case of the U.S. airline industry. Journal of Accounting, Auditing and Finance 14 (1): 29-56.
Brazel, J., and J. Schmidt. 2018. Do Auditors and Audit Committees Lower Fraud Risk by Constraining Inconsistencies between Financial and Nonfinancial Measures?: American Accounting Association journal. Accepted manuscript.
Brazel, J., K. Jones, and D. Prawitt. 2014. Auditors’ reactions to inconsistencies between financial and nonfinancial measures: the interactive effects of fraud risk assessment and a decision prompt. Behavioral Research in Accounting 26 (1): 131-156.
Brazel, J., K. Jones, and M. Zimbelman. 2009. Using nonfinancial measures to assess fraud risk. Journal of Accounting Research. 47 (5): 1135-1166.
Brown, A., J. Dai, and E. Zur. 2016. The effect of director busyness on monitoring and advising: Evidence from a natural experiment. Working paper, Utah State University.
Campbell, J., J. Hansen, C. Simon, and J. Smith. 2015. Audit committee stock options and financial reporting quality after the Sarbanes-Oxley Act of 2002. Auditing: A Journal of Practice and Theory 34 (2): 91-120.
Carcello, J., and A. Nagy. 2004. Audit firm tenure and fraudulent financial reporting. Auditing: A Journal of Practice & Theory 23 (2): 55-69.
Chin, C-L. and H-Y Chi. 2009. Reducing restatements with increased industry expertise. Contemporary Accounting Research 26 (3): 729-765.
Chu, L, B. Church, and P. Zhang. 2013. Does long tenure erode auditor independence? Working Paper, Wilfrid Laurier University.
Cohen, J., U. Hoitash, G. Krishnamoorthy, and A. Wright. 2014. The effect of audit committee industry expertise on monitoring the financial reporting process. The Accounting Review 89 (1): 243-273.
Davis, L. R., B. S. Soo, and G. Trompeter. 2009. Audit tenure and the ability to meet or beat earnings forecasts. Contemporary Accounting Research 26 (2): 517-548.
Dechow, P., W. Ge, C. Larson, and R. Sloan. 2011. Predicting material accounting misstatements. Contemporary Accounting Research 28 (1): 17-82.
Dyck, A., A. Morse, and L. Zingales. 2010. Who blows the whistle on corporate fraud? Journal of Finance 65 (6): 2213-2253.
Farber, D. 2005. Restoring trust after fraud: does corporate governance matter? The Accounting Review 80 (2): 539-561.
Hammersley, J. 2006. Pattern identification and industry-specialist auditors. The Accounting Review 81 (2): 309-336.
Hennes, K.M., Leone, A.J., and B.P. Miller. 2013. Determinants of and market consequences of auditor dismissals after accounting restatements. The Accounting Research 89(3): 10511082.
Hirst, D., and L. Koonce. 1996. Audit analytical procedures: A field investigation. Contemporary Accounting Research 13 (2): 457–486.
Hogan, C.E., Z. Rezaee, R.A. Riley, and U. Velury. 2008. Financial statement fraud: Insights from the academic literature. Auditing: A Journal of Practice & Theory 27 (2): 231-252.
http://www.coso.org/documents/COSO%202013%20ICFR%20Executiv_Summary.pdf.
Jensen, M., and W. Meckling. 1976. Theory of the firm: Managerial behavior, agency
Johnstone, K.M. and J.C. Bedard. 2004. Audit firm portfolio management decisions. Journal of Accounting Research 42 (4): 659-690.
Knechel, W. R., and A. Vanstraelen. 2007. The relationship between auditor tenure and audit quality implied by going concern opinions. Auditing: A Journal of Practice & Theory 26 (1): 113-131.
Krishnan., G. V. (2003). Does Big-6 Auditor Industry Experience Constrain Earnings Management?. Accounting Horizons (Supplement), Vol. 17, No. 1, Pp. 1-16.
Messier, W., S. Glover, and D. Prawitt. 2012. Auditing and Assurance services: A Systematic Approach, 7th ed. New York: McGraw-Hill Irwin.
Mock, T., J. Bedard, P. Coram, S. Davis, R. Espahbodi, and Warne, R. 2013. The audit reporting model: Current research synthesis and implications. Auditing: A Journal of Practice and Theory 32 (Special Issue): 323–351.
Mustafa, S., and H. Meier. 2006. Audit committees and misappropriation of assets: publicly held companies in the United States. Canadian Accounting Perspectives 5 (2): 307-333.
Myers, J., L. Myers, and T. Omer. 2003. Exploring the term of the auditor-client relationship and the quality of earnings: A case for mandatory auditor rotation? The Accounting Review 78 (3): 779-799.
Reichelt., K.J., and D. Wang. 2010. National and office-specific measures of auditor industry expertise and effects on audit quality. Journal of Accounting Research 48 (3): 647-686.
Rezaee, Z., and Riley, R., (2010). “Financial Statement Fraud-Prevention and Detection.” 2nd edition, John Wiley & Sons, Inc.
Spira, L. 2002. The Audit Committee: Performing Corporate Governance. London: Kluwer Academic Publishers.
Trompeter, G., and A. Wright. 2010. The world has changed - have analytical procedure practices? Contemporary Accounting Research 27 (2): 669-700.
Trompeter, G., T. Carpenter, N. Desai, K. Jones, and R. Riley. 2013. A synthesis of fraud related research. Auditing: A Journal of Practice & Theory 32 (Supplement): 287-321.
Auditing standards development committee of the auditing organization(2015) Auditor's Responsibility for fraud and error in the audit of financial statements. Tehran. [In Persian].
Bahrami, A., Noravesh, I., Raad, A., Molqarani, M.A. 2020. Forecasting the Financial Statements Fraud Detection of Companies Listed on the Stock Exchang. Empirical Studies in Financial Accounting 65 (16): 35-59. [In Persian].
Kazemi, T. (2016). Identify examples of fraud risk in financial statements in Iran and evaluate its detection methods. Doctoral thesis, University of Shahid Chamran. [In Persian].
Kodadadeh, Sh., Nahandi, U.(2017). The effect of auditor expertise in industry and auditor tenure on the comparability of financial statements with emphasis on the life cycle of the company. Journal of Financial Accounting Research. 205-127. [In Persian].
Mirfendereski, S. M. T., Ghaderi, B., Akhondi, M. (2018) Relationship between auditor tenure and risk of financial reporting fraud with controlling the effect of environmental uncertainty. Journal of Certified Public Accountants. (43). 56-65. [In Persian].
Naderian, M. N., Safar, M. J.(2001)Auditors' Responsibility for Fraud. Journal of the Auditor.3(13). 46-54. [In Persian].
Puria Nasab, A. (2005). Comprehensive structure to help analyze, detect and prevent fraud. Journal of Certified Public Accountants. (3). 27-36. [In Persian].
Safarzadeh, M. H., Mohammadi, E., 2019. The Effect of Audit Committee Characteristics on the Relationship between Audit Report Timeliness and Auditor Task Complexity. Empirical Studies in Financial Accounting 62 (16): 45-76. [In Persian].
Shaikh, M. J. (2004). Investigating the importance of indicators of potential financial fraud using factor analysis technique in Iranian companies. Doctoral thesis, University Of Tehran. [In Persian].
)