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Auditors Tenure and Quality of Profit in Automotive and Food Industries

Journal of Commerce and Accounting Research

Volume 6 Issue 3

Published: 2017
Author(s) Name: Arash Azadikhah Jahromi, Fatemehsadat Mousavifard, Ali Mosallanejad, Adbolhossein Ayoubi | Author(s) Affiliation: Accounting Trend Audit field, Mgt. Dept., Islamic Azad Univ., North Tehran Branch, Tehran, Iran.
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In the present study, the role of accruals is evaluated in quality of profit in companies accepted in Tehran stock exchange market while the relationship between qualities of profit via accruals is studied with auditors tenure. In this study, number of years of auditors tenure in an organisation is considered as an index for auditors retention. Sample consists of 61 companies involved in automotive and food industry. Results show that when an auditors tenure is longer, and more audits are done by the auditor, productivity of company and the quality of profit are increased more. It seems there is a negative significant relationship between auditors tenure and bracket of accruals. Any studies can be advantageous for investors and data users regarding the quality of profit and determination of effective factors on its unreal reflection for hidden or unreal profits.

Keywords: Accruals, Auditor Tenure, Quality of Profit, Cash flow

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