The role of Audit Quality and Cultural Influence on Earnings Management in Companies with Excessive Free Cash Flow: Evidence from Tehran Stock Exchange

Yousefiasl, Farzaneh; Yarijani, Atefeh

The role of Audit Quality and Cultural Influence on Earnings Management in Companies with Excessive Free Cash Flow: Evidence from Tehran Stock Exchange

Document Type : Original Article

Authors

Farzaneh Yousefiasl ¹

atefeh yarijani ²

¹ Assistant Prof., Faculty of Management & Finance, Khatam University, Tehran, Iran

² MSc in Accounting. Faculty of Management & Finance, Khatam University, Tehran, Iran

Abstract

The role of Audit Quality and Cultural Influence on Earnings Management in Companies with Excessive Free Cash Flow: Evidence from Tehran Stock Exchange
this study examines the impact of audit culture and quality on managers' decisions regarding accrual accounting. The sample consisted of 73 companies listed in Tehran Stock Exchange for year 5, using multivariate linear regression model to test the research hypotheses using cross-sectional data. The results of the hypotheses test suggest that the managers of very high free cash flow firms with low growth opportunities did not choose earnings management through increased earnings and the relationship between uncertainty avoidance index and earnings management was reduced.. There was no significant difference, in addition, the results showed that the corporate uncertainty avoidance index did not moderate the relationship between free cash flow and earnings management in low-growth firms, and the relationship between audit quality and reduced earnings management activities... There is no meaning, and in addition, high quality auditors modify the relationship between jerks free cash flow in low growth

Keywords

Audit Quality

Earnings Management

Free Cash Flow

Culture