Abstract

The purpose of this study was to review the role of audit quality in reduction of information asymmetry in Iran`s capital market. According to literature, high quality disclosure would result in publicizing some confidential information, decreasing the amount of information speculation by aware exchangers, and reducing investors` motives for gaining confidential information. So it is expected that increase of audit quality leads to decrease of information asymmetry. To achievement of research goals, one main hypothesis and two sub-hypotheses were provided which supposed the significant adverse relationship between auditing quality and information asymmetry. In this research auditing quality is measured through auditing institution`s size and auditor`s rotation. Research population includes listed companies in Tehran stock exchange and Study duration encompasses the beginning of year 1388 to the end of year 1390. Results show that that auditing quality does not affect the information asymmetry reduction in Iran`s capital market. Auditing quality, Information asymmetry, Auditor turn over.