International Journal of Finance & Managerial Accounting

International Journal of Finance & Managerial Accounting

The Relationship between the Auditor's Report Tone and Audit Market Competition

Document Type : Original Article

Authors
Hojat Mohammadi 1
Mahdi Salehi 2
Meysam Arabzadeh 3
Hasan Ghodrati 3
1 Accounting Ph.D. Candidate, Department of Accounting, Kashan Branch, Islamic Azad University, Kashan, Iran
2 Accounting Prof., Department of Accounting, Kashan Branch, Islamic Azad University, Kashan, Iran
3 Accounting Assistant Prof., Department of Accounting, Kashan Branch, Islamic Azad University, Kashan, Iran
10.30495/ijfma.2023.21592
Abstract
The Relationship between the Audit Report Tone and Audit Market Competition

Abstract
Purpose – The primary purpose is to investigate the relationship between the tone of the audit report and
the audit market competition.
Design/methodology/approach – A descriptive-correlational study is conducted based on the published
information listed firms on the Tehran Stock Exchange during 2012-2019 with a selected sample of 128
firms. The method used for hypothesis testing is linear regression using panel data.
Findings -The results show a positive and significant relationship between the audit report tone and
competition in the audit market based on two indicators of auditor's and client’s concentrations.
Moreover, to obtain better results using exploratory factor analysis of two variables, the relationship
between the tone of the audit report and competition in the audit market was examined. The results
showed a positive and significant relationship between the tone of the audit report and audit market
competition with factor analysis.
Originality/value – Since the present study is conducted in an emerging financial market, like Iran,
where the auditing market is highly competitive, determining the relationship between the tone of the
audit report and audit market competition can provide useful information for readers.
Keywords: audit report tone, audit market competition
Keywords
Keywords: audit report tone
audit market competition
auditor's and client’s concentrations
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