University of Isfahan Financial Accounting Research 2322-3405 5 2 2013 07 23 The Role of Auditor Characteristics in Earnings Quality The Role of Auditor Characteristics in Earnings Quality 93 108 16980 FA S Mehrani Associate Professor of Accounting, University of Tehran, Iran M Moradi Assistant Professor of Accounting, University of Tehran, Iran M Nakhaei Ph.D. Student of Accounting, University of Tehran, Iran M Motmaen Ph.D. Student of Accounting, University of Tehran, Iran Journal Article 2016 06 14  The recent financial scandals have raised concerns about the quality of the financial reporting. While the responsibility of preparing these reports lies with the managers of the companies, the auditors have also received accusations as a result of the scandals. Therefore, the objective of the present study is to investigate the possible effects of the auditor characteristics on the quality of financial reporting (earnings quality). Specifically, the study is focused on two features: the tenure and the size. In addition, in order to examine the earnings quality, three dimensions including the predictive and verifiability value, neutrality , and the conservatism are selected and examined based on the Conceptual Framework for Financial Reporting in Iran. The results of a multiple regression analysis indicated no significant relationship between the characteristics of the auditors and the three dimensions of the earnings quality. In other words, auditor tenure has no meaningful effect on earnings quality. Specifically, the results indicated that the period of time the employer and the auditor working together has no meaningful effect on the employer’s earnings quality. In addition, no meaningful relationship was found between the size of the audit firm and the earnings quality indicating that there is no significant difference between the earnings quality of the companies audited by the Audit Organization and those audited by the Iranian Association of Certified Public Accountants (IACPA) and also between the performance of these firms and the Audit Organization.  The recent financial scandals have raised concerns about the quality of the financial reporting. While the responsibility of preparing these reports lies with the managers of the companies, the auditors have also received accusations as a result of the scandals. Therefore, the objective of the present study is to investigate the possible effects of the auditor characteristics on the quality of financial reporting (earnings quality). Specifically, the study is focused on two features: the tenure and the size. In addition, in order to examine the earnings quality, three dimensions including the predictive and verifiability value, neutrality , and the conservatism are selected and examined based on the Conceptual Framework for Financial Reporting in Iran. The results of a multiple regression analysis indicated no significant relationship between the characteristics of the auditors and the three dimensions of the earnings quality. In other words, auditor tenure has no meaningful effect on earnings quality. Specifically, the results indicated that the period of time the employer and the auditor working together has no meaningful effect on the employer’s earnings quality. In addition, no meaningful relationship was found between the size of the audit firm and the earnings quality indicating that there is no significant difference between the earnings quality of the companies audited by the Audit Organization and those audited by the Iranian Association of Certified Public Accountants (IACPA) and also between the performance of these firms and the Audit Organization. https://far.ui.ac.ir/article_16980_b4b11d2afb9007fbe1918982c4fde6f3.pdf