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The relationship of conservatism with the auditor's strategies to deal with the client risk

    Authors

    1 Ph.D. Student in Accounting, Faculty of Management & Accounting, Islamic Azad University, Qazvin, Iran

    2 Assistant Prof, Faculty of Economic and Social Science, Bu-Ali Sina University, Hamadan, Iran.

    3 Ph.D. Student in Accounting, Faculty of Management & Accounting, Islamic Azad University, Qazvin, Iran.

,

Document Type : Research Paper

Abstract

Client accounting conservatism is one of the factors that affect the audit project risk. Auditors can use a variety of strategies to deal with the client risks. In order to test the client conservative accounting relationship on using different strategies by the auditors to address the Client risk, the data of 136 companies (680 observations) listed in Tehran Stock Exchange during the years 2010-2014 were collected. Research hypotheses have been tested using multiple regression, panel data, and logistic regression. The results show that the client accounting conservatism reduces the audit fees and there is an inverse and significance relationship between the client conditional conservatism and the issuance of the auditor's going concern opinion. There is also an inverse and significance relationship between the inverse and significance and the auditors resign. In other words, the more client conservatism accounting is, the less auditor resigns. Therefore, the findings of the research showed that auditors have significantly charge fewer audit fees for, issue less going concern opinion, and less change frequency, which is consistent with the view that accounting conservatism reduces audit project risk.

Keywords

References

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Financial Accounting Knowledge
Volume 5, Issue 1 - Serial Number 16
June 2018
Pages 101-125
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