FINANCIAL REPORTING QUALITY MEASURES WITH THE EFFECT OF AUDIT QUALITY INDICATORS ACCEPTED AT TSE

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1 FINANCIAL REPORTING QUALITY MEASURES WITH THE EFFECT OF AUDIT QUALITY INDICATORS ACCEPTED AT TSE *Reza Akbari The Auditor of Iran s Supreme Audit Court, the Province of Kohgiluyeh and Boyer-Ahmad, Iran *Author for Correspondence ABSTRACT According to Angelo di perspective (1998), increased quality of service audit information asymmetry between reduced managers and suppliers of capital and accounting information quality by reducing the costs of moral hazard and selection improves. This research aims to study the economic impacts of the aspect of the position of auditing services in Iran, to the correlation between the quality of financial reporting and the quality of auditing accepted in Tehran stock exchange deals. To achieve the objectives of the study, the number of 110 companies as examples for period was selected. Applied research of target type and its methods of correlation type and so is rvidadi. Financial reporting to measure the quality of the three Dchu and Dichu (2002) Kotari et al., (2005) and MacNichols and Astaban (2008) and for measuring the quality of audit of the auditor is expertise in the industry, three's reputation and the tenure of the auditor is used. The combined data of the study was to test the hypothesis. The results showed that the quality of financial reporting and auditing between the quality of a positive and statistically significant correlation there. Thus, increasing the quality of audit and information asymmetry problems by reducing the representation of the different groups and between the beneficiaries, thereby enhancing the quality of financial reporting. Keywords: Auditor's Reputation in the Industry, Expertise, Quality, Financial Reporting Auditor Tenure INTRODUCTION The ever-increasing expansion of economic units and the complexity of it, increasing the share of small shareholders in the company are serious and it is a conflict of interest, the needs of the more essential regulatory information. In this environment the use for a variety of information including decisions, financial information, about need economic enterprises. In this regard the financial basis as most financial information collection companies and represent the results of their activity can be considered. But the important question of doubt about the ability of that information is on. The lack of direct access to information, process it and load losses and misleading information is more important than it is a conflict of interest by virtue of the increasing demand for high-quality service has been audited (Jacob and Amiri, 2009). One of the most common definitions of audit quality, about the definition is provided by di Angelo (1981) is offered. He has defined the quality audit is this: assessment of market (inferred), the Auditor (1) items of financial with the importance of in the event of distortions or accounting system the owner discovered the work, and (2) distort the report detected with the importance of. The probability that the Auditor discovered the items with the importance of distortions to the competence of the Auditor, and the possibility that the auditor to report distortions with the importance of cases discovered to depend on the auditor's independence (DOS and Pundit, 2010). One of the objectives of financial reporting, the information that is provided to investors, aatbardindgan and other current and potential users in decisions relating to investment and other decisions are accredited, is beneficial. One of the important criteria that the aforementioned groups to estimate the strength of the company's profitability, forecasting future profits and risks relating to it and also evaluate the performance of the management, the company's current and past profits. In other words, managers are trying to pick up the authorized methods of accounting, the results with predictable and fixed their creation. Because, most of the investors and managers believe good profitability trend the company and profits they suffered major changes cannot be made, relative to similar companies worth more and more predictions and have more standalone. On the other hand, with regard to the representation theory of Copyright 2014 Centre for Info Bio Technology (CIBTech) 2503

2 motivation of managers can be necessary for the manipulation of profit in order to maximize the benefits of their own (LI and Wang, 2010). Biddle et al., (2009) high quality of accounting information that can be one of the ways to prevent and reduce the profit management. Because it is believed that the quality of financial reporting, companies have a high content of information are more quality and profit. DOS and pundit (2010) States that one of the important factors to enhance the quality of financial reporting, reduce the asymmetry of information by increasing. The quality of the audit. So the aim of this study is whether the quality of the financial reporting and audit quality between the companies accepted on the Tehran Stock Exchange there is a correlation? Literature and History Research Based on agency theory, as representatives of the shareholders, managers may have to act or to adopt the decisions that are not necessarily in order to deliver maximum shareholders ' wealth is not. According to this theory, the control activity or mechanism should be sufficient to help protect shareholders nzarati in front of the conflict of interest is created (Chen et al., 2011). Is the subject of the quality of the information provided in financial reporting it as a practical solution is taken into consideration. The optimal quality and transparent flow of information asymmetry can be decreased. One of the most important approaches to enhance the quality of accounting information, pay attention to the concept of audit quality is (Karamano and Vafis, 2005). Based on the research done, higher-quality audit the accuracy improves accounting and information to users, especially investors, gives more opportunities with the financial situation and the results of their analysis of the company's performance. Based on the theory of demand, companies with the technology. The auditor that mshahortrnd seek to show that the quality of the financial information form is more desirable. Need to solve another stimulus to demand representation tenders as well as quality audit is. Asymmetric information between owners of capital (in suitable) and representative (Manager) cause mental turbulence and this concern emerged that comes your personal interests, representative of the cost of capital for the owner. Based on the theory of representation, the representative of the owner of the capital and that is to the benefit of both sides that reduced mental turbulence so that the arrangements made for their personal interests, it also respect them. One of these devices is an independent audit regulatory tool to improve information about the company's financial condition and performance and increase the symmetry of information. The more demand for the great capital representing between managers and owners to be more, more representation costs and the need for an independent audit will be higher quality afazonter. Other research was done about the quality of the audit, the audit on the quality of the supplied by independent auditors has been centralized (Mark, 2005). Taking into account the financial reporting as a process that several participants at every stage of it exists, a contributor to financial reporting information for the capital market, which receives, normally of that information, along with other information to do a judgment (for example about the risks of bankruptcy or the gap between an outcome and a prediction) or a decision (for example, where and what the investment amount) uses, therefore, is determined by The primary objective of financial reporting information on the capital markets is that certain decisions of the judgment and the quality of financial reporting, so support is primarily due to the view that high-quality information to the judgments and decisions of more quality leads is about respect. That is, financial reporting, information quality, information quality, compared to the bottom, there is a greater usefulness in decision (Francis et al., 1988). One of the negative consequences of the financial reporting and low quality, increase information asymmetry and moral hazard as a result and choice. It is believed that the quality of the accounting information quality to be high audit by reducing information asymmetry gives rise. Chambers and Pine (2008), explores the relationship between auditing quality and more engaged commitment items on. In this study, to measure the quality of audit of the auditor's independence, expertise of the industry, credit risk and legal claims raised were used for the audit institutions. The results showed that between the audit quality and the ability to rely on commitment items of positive communication and acceptance of law sarbanz Oxley there is significant. Copyright 2014 Centre for Info Bio Technology (CIBTech) 2504

3 Biti and colleagues (2010) to study the relationship between the quality of financial reporting and the efficiency of investment in terms of acquiring private information between the years engaged in manufacturing co They were waiting for access to specific information and restrictions on direct investment, by reducing information asymmetry may be in the form of increasing the quality of accounting information, increase investment efficiency. They said that companies that have a lower quality of the accounting information, a potential tendency to rent out their property to buy them. Research results, showed that it was that even though the Organization concludes contracts out lenders limiting access to specific information, and the importance of the quality of accounting information decreases, but basically the limitation of in the investment process, leading to an increase in investment performance and the effect of the quality of the accounting information reduces investment brkaraiy. Lee and Wang (2010) indicated that high quality of accounting information asymmetry of information between managers and external stakeholders will help reduce that investment decisions will be adopted in the form of A more desirable. In this regard. Chen et al., (2011) would suggest that private companies to lower the quality of the public companies accounting but however, in private companies as well, increasing the quality of financial reporting contributes to the investment performance. Information on the belief that high quality of accounting to be able to manipulate the administrators actions in order to reduce the real items. Because with the increase in the quality of financial reporting costs and choice reduces the moral hazard as well as a regulatory mechanism for the managers of the legal opportunity behaviors will be considered. Therefore, it is expected that the accounting information quality by increasing the amount of manipulation of accounting items through real activities reduced. Abadi and Rezai (2012), to examine the impacts of management on the quality of financial reporting profits in the company Accepted in Tehran stock exchange began. The results of this research suggests that it is between the management of profits with both optional and non-optional part quality, there is a significant inverse relationship between commitment item which means that generally a reverse effects on the quality of management, financial reporting profits in the companies accepted in the Tehran stock exchange. Badaor (2013) to examine the relationship between auditing quality and efficiency of investment in 100 companies accepted on the Tehran stock exchange for the period points. They are to measure the quality of audit of the auditor is expertise in the industry, mechanism 4 reputations and independence of the Auditor, auditor's tenure were used. The results showed that between the quality of the audit and performance of investment there is a significant and positive relationship. Thus, by increasing the amount of investment classification audit quality reduced. The Research Hypothesis The Main Hypothesis: Audit quality and quality between the amounts of financial reporting, there is a connection. The Hypothesis of the First Subsidiary: Between the expertise of the auditor of the financial reporting quality in the industry and there is a connection. The Second Subsidiary Hypothesis: Financial reporting and Auditor reputation between the qualities of the relationship there. The Third Subsidiary Hypothesis: Between financial reporting and Auditor tenure there is the quality of the relationship. Statistical Society Statistical research community includes all the accepted companies in Tehran stock exchange. In this study, the systematic removal of sampling has been used. In other words, for statistical sampling, the following conditions have been considered and all companies are members of the community have been carried out with the following conditions, the study said. These conditions are as follows: 1. Financial information company for the research period available. 2. In order to increase the capability of the financial year, compared to the end of March, the company is manthi. Copyright 2014 Centre for Info Bio Technology (CIBTech) 2505

4 3. Shrkthaie, which until the end of the year 2006 has been accepted in the stock exchange and the company name in the course of the study, the company accepted on the Tehran stock exchange is not removed. 4. Type of leasing companies, credit institutions, investment, insurance or financial intermediaries is not cast. 5. Trading interruptions do not have more than 6 months. By applying the above criteria, the number of 110 were selected as samples and company data relevant to their 6 year ( ) of financial and software bring new RA were extracted. MATERIALS AND METHODS Research Method This study was descriptive in terms of the nature and purpose of correlation, and applied. Statistical models of these resources in the multivariate regression model are research. In this research for hypothesis testing of hybrid data has been used in combination to choose between the data Panel and methods of panel and pouling, F-test limmer is used. If you use the method for the selection of the test Panel, hasman between fixed and random influences influences methods are done. Statistical analysis can be done through the Eviews software. Finally, the hypothesis of this research through the t-test, Fisher's F and the coefficient of determination (R2) placed a test case. More, how to calculate the quality of financial reporting and auditing the quality used models to describe and test the hypothesis of research potential. The Research Variables Dependent Variables: The Quality Of Financial Reporting In this study, in accordance with the research Biddle et al., (2009) and Chen et al., (2011), Gomariz and Balsta (2013) of the three indicators for the measurement of the quality of financial reporting is used. First benchmarks: measuring the first criterion would be adjusted on the basis of optional items functionality is provided by Cotari et al., (2005) is presented. All the models are calculated as years of industry. TAccri,t = α0 + α1 (1 / Assetsi,t-1) + α3 ΔRevi,t + α3 PPEi,t + α4 ROAi,t + εi,t TAccri, t: total accruals as the change in non-cash current assets minus current liabilities Change in noninterest expense, minus depreciation of tangible assets and intangible costs for the company in the year, divided by total assets at the beginning of the period. ΔRevi, t: operating income divided by total assets at the beginning of the annual period. PPEi, t: Property, plant and equipment assets for firm i in year t divided by the beginning of the year ROAi, t: return on assets for firm i in year t divided by assets, beginning of year The remaining regressions, suggesting that discretionary accruals. Criterion II: calculation of the quality of the items dchu and دیچو based on the tahdi model (2002) is. How to measure this model is as follows: TCAccri,t = α0 + α1 OCFi,t-1 + α2 OCFi,t + α3 OCFi,t-1 + α4 ΔRevi,t + α5 PPEi,t + εi,t Where: TCAccri, t: total current tahdi items that are current with changes in brabrast Assets except cash minus the change in the current Liabilities current Liabilities except long-term trade, divided by the total Assets the beginning of the course. OCFi, t-1: total operating cash flow divided by the Assets the beginning of the course. Operating cash flow is equal to the sum of gross profit and cost asthalak a change in the current Liabilities current Assets change over. ΔRevi, t: annual sales divided by total changes Assets the beginning of the course. The remainder of the equation represents the current tahdi items in bravardi errors that have no relation with the operational cash flow and cannot be changed through defined in income and level of PPE. Criterion III: precautionary income is provided by astaban (2010) and Mac Nichols and astaban (2008) are presented. The estimation criterion of Regression pattern below is used: DARi,t = α0 + α1 DRevi,t + εi,t Copyright 2014 Centre for Info Bio Technology (CIBTech) 2506

5 DARi, t: annual accounts receivable divided by the total changes Assets the beginning of the course. DRevi, t: annual changes of total earnings divided by the Assets the beginning of the course. The remaining income is optional, pattern. Independent Variables: the Quality of the Audit Auditor reputation (AUD_REP): in this study is the result of the Division's reputation of a total assets of special auditing Institute of employers all in total assets of stock companies on the whole accepted on the Exchange will be achieved. This is the only variable for measuring total in auditing auditor reputation of scholarship to work and is independent of the company's auditing properties (Badaor, 2013). The tenure of the Auditor (AUD_TEN): in order to correct during the period measured, should be available, in which sali auditor to employ commercial unit come on. To determine the date for the shrkthaie during your study period, auditors were changed, there is no problem, but for all of the shrkthaie in the period of the study, one of the Auditors have been used to determine the first year's work started according to the information available, it is not possible (Karami et al., 2010). To the profile for at least because of any basis for measurement error of measurement during the period of 2 years before the start of this period will be considered. The industry's expertise (AUD_SPEC): In this study, since market share as a measure for measuring the industry's expertise will be used, because the industry's priority relative to other Auditors shows. Whatever the industry's market share is higher, the industry expertise and experience is more than the other's competitors. Furthermore, having a high market share (the dominant market share) refers to the point that the auditor is the success of its other competitors were in terms of the quality of auditing are distinct (Don and Vilkenz, 2003). Market share is calculated to this case, auditors may be: total assets of all sahbkaran are a special auditing Institute in a special division of assets on a total industry sahbkaran the whole industry. Control Variables According to the research of Biddle et al., (2009), Chen et al., (2011), Gomariz and Balsta (2012) the number of control variables to isolate the relationship between auditing quality and quality mechanisms of financial reporting was selected company: SIZE (size): Logarithm of the value of the total office assets; Lev (financial leverage): Total debt divided by total assets; MBV (growth opportunities): Equity market value divided by the value of their Office; CFO_SAL (cash flows) the operational cash flow: net sales divided by; DIV (dividend of divider): Payable dividend per share divided by dividend per share; CON (the focus of ownership): Hrfindal-hirshman index (HHI), for the calculation of the ratio of concentration of ownership can be used. The aforementioned index of total shareholders ' equity belonging to companies using the% will be achieved. MGO, (property management): This variable is the sum of the percentage of shares of each of the members of the Board of Directors of the company can be calculated. How to determine the ownership of specific management for each of the following relationship: Number of shares at the discretion of the Board of Directors divided by the total number of shares issued by the company. Risk (β): Beta represents the sensitivity and volatility of securities in the resulting volatility per Division of the covariance of and return on securities (Risk of net assets) and the variance in efficiency achieved pay market will pay its efficiency. RESULTS AND DISCUSSION The Findings of the Research Table 1 shows the descriptive statistics of the variables. As can be seen, the average auditor expertise in the industry, the reputation of the auditor and auditor tenure respectively 19.5, 16.2 and 3.71 are. The Copyright 2014 Centre for Info Bio Technology (CIBTech) 2507

6 second measure of quality reporting mean, first and third, respectively -.039, and is remarkably consistent with research by Chen and colleagues (2011) there. The quality standards of financial reporting, the third highest standard measure of dispersion and dispersion is the lowest. Table 1: Descriptive statistics for variables The maximum The minimum Standard deviation Middle Average Variable name AUD_SPEC AUD_REP AUD_TEN FRQ (Second criterion) FRQ (First criterion) FRQ (Third criterion) SIZE MBV LEV CFO-SALE DIV CON MGO BETA Hypothesis Testing Research The first step: homogeneous or heterogeneous data detection using limmer test (chav) Table 2: The F test Lymr (similar intercept points) P-Value P-Value P-Value Test The null hypothesis (H0) The sixth hypothesis The seventh hypothesis The eighth hypothesis The ninth hypothesis The first hypothesis The second hypothesis The third hypothesis model The fourth hypothesis model The fifth hypothesis model Intercept is the same for all sections together H0 hypothesis tests on the F limmer, data fusion method in front of hypothesis H1; i.e. the given method grew up the show. Due to the significant level of image is 2, the result is this test indicates this entry that is heterogeneous and review sections have been individual differences, so the use of the data for each model grew 9 is more suitable. After choosing the method of test data, test by limmer IP44 hasman was performed. In this test in the case of random effects models H0 is accepted and if the fixed effects model H1 is accepted is used. Summary of the test results are presented as hasman image is 3: Table 3: Test results of hasman (choose between fixed and random effects) P-Value P-Value P-Value Test The null hypothesis (H0) The sixth hypothesis The seventh hypothesis The eighth hypothesis The ninth hypothesis The first hypothesis The second hypothesis The third hypothesis model The fourth hypothesis model The fifth hypothesis model The difference in coefficients not systematic Copyright 2014 Centre for Info Bio Technology (CIBTech) 2508

7 As the results of image 3 shows, the value of this statistic is significant for all the models and the level وH0 was reported in PD 3 p for each model is less than 9 and represent the rejection of the hypothesis of H1 hypothesis at the level of acceptance of 95%, and on the use of fixed effects method implies. The Hypothesis of the First Subsidiary Between the expertise of the auditor of the financial reporting quality in the industry and there is a connection. The results of image 4 show that between the industry s expertises (AUD_SPEC) and the quality of financial reporting (FRQ) significant positive correlation (p) level and there is significant. Thus, the presence of the Auditors in companies that specialize in industry, the amount of accounting information quality in the upper level. The research findings with the results obtained from the research DOS and Pundit (2010), Chen et al., (2011); Bai and Choie (2012) and Badaor (2013) is consistent. Adjusted coefficient of determination of the test indicates that model in the order 2/11, cases and 3/4% of the dependent variable changes the quality of financial reporting by the independent variable's expertise in the industry and other variables has to be clarified. Watson Research models between camera outputs 1.5 and its industries, and represent a lack of correlation between sentences is a regression error in the equations. A significant level of F for all three models equal to the p and p is smaller than the percentage that the total of significant model. Table 4: The relationship between auditor industry specialization and the quality of financial reporting FRQ (third criterion) FRQ (first criterion) FRQ (second criterion) Variable names Constant (-1.177) (1.296) (1.715) AUD_SPEC (1.909) (3.038)** (3.072)** SIZE (-0.408) )-2.866(** (-3.059)** LEV (2.063)* )3.236(** )4.187(** MBV (2.85)** )5.019(** )4.578(** CFO_SAL (0.977) (0.618) (1.195) DIV (-.968) (-0.644) (-1.275) -1-0/ CON (-0.109) (-1.648) (-2.758)** MGO (-2.645)** (-2.278) )-2.859(** BETA (-2.380)* (-2.909)** (-2.721)** Adjusted R Watson camera F-statistic Probability of F statistics The Second Subsidiary Hypothesis Financial reporting and Auditor reputation between the quality of the relationship there. The results of image 5 shows that between the reputation of Auditor (AUD_REP) and the quality of financial reporting (FRQ) significant positive correlation (p) level and there is significant. Thus, in azhesabrsan a high Copyright 2014 Centre for Info Bio Technology (CIBTech) 2509

8 reputation with companies that has used the amount of accounting information quality in the upper level. The research findings with the results obtained from research and alder (2004) and Zhao (2011) and Badaor (2013) is consistent. Adjusted coefficient of determination of the test indicates that model to order 1/12, above, and 8/3% of the dependent variable changes the quality of financial reporting by the independent auditor of the reputation and other variables the variables to be clarified today. Watson Research models between camera outputs 1.5 and its industries, and represent a lack of correlation between sentences is a regression error in the equations. A significant level of F for all three models equal to the p and p is smaller than the percentage that the total of significant model. Table 5: Relationship between the auditor reputation and quality of financial reporting FRQ (third criterion) FRQ (first criterion) FRQ (second criterion) Variable names -0/056 0/053 0/050 Constant )-1/280( )1/086( )1/154( 0/007 0/027 0/019 AUD_SPEC )0/887( )2/853(** (2/240)* -0/001-0/011-0/009 SIZE )-0/335( )-2/783(** (-2/568)** 0/032 0/058 0/065 LEV )2/319(* )3/711(** )4/683(** 0/005 0/011 0/009 MBV )2/954(** )5/227(** )4/918(** 0/010 0/005 0/010 CFO_SAL )0/838( )0/404( (0/897) -0/ /008 DIV )-1/064( )-0/749( (-1/474) 0/001-0/017-0/025 CON )0/076( )-1/326( (-2/878)* -0/024-0/022-0/025 MGO )-2/495(* )-1/993(* (-2.599)** -0/006-0/008-0/011 BETA )-2/217(* )-2/618(** (-4/045)** 0/038 0/ 093 0/121 Adjusted R2 1/968 1/ 796 1/808 Watson camera 599/3 721/6 9/030 F-statistic 006/0 00/0 0/00 Probability of F statistics The Third Subsidiary Hypothesis Between financial reporting and Auditor tenure there is the quality of the relationship. The results of image 6 shows that between the tenure of the Auditor (AUD_TEN) and the quality of financial reporting (FRQ) significant negative correlation (p) level and there is significant. Thus, in the relations between the company auditor-son of the accounting information quality is long, the rate is lower in level. The research findings with the results obtained from the research DOS and Pundit (2010); and Badaor (2013) is consistent. Adjusted coefficient of determination of the test indicates that model in the order 4/12, respectively, and dependent variable changes the quality mark of financial reporting by the independent auditor of the tenure variable and other variables has to be clarified. Watson Research models between camera outputs 1.5 and its industries, and represent a lack of correlation between sentences is a regression Copyright 2014 Centre for Info Bio Technology (CIBTech) 2510

9 error in the equations. A significant level of F for all three models equal to the p and p is smaller than the percentage that the total of significant model. Table 6: The relationship between auditor tenure and quality of financial reporting FRQ (third criterion) FRQ (first criterion) FRQ (second criterion) Variable names -0/053 0/061 0/056 Constant )-1/222( )1/086( )1/302( 0/001-0/003-0/003 AUD_SPEC )-1/096( )-2/671(** )-2/661(** -0/001-0/010-0/008 SIZE )-0/243( )-2/536(* )-2/342(** 0/031 0/055 0/063 LEV )2/251(* )3/51(** )4/521(** 0/005 0/010 0/009 MBV )2/886(** )5/040(** )4/759(** 0/010 0/005 0/010 CFO_SAL )0/835( )0/392( )0/889( -0/006-0/006-0/009 DIV )-1/119( )-0/903( )-1/611( 0/001-0/017-0/025 CON )0/073( )-1/349( )-2/302(* -0/025-0/023-0/026 MGO )-2/516(* )-2/064(* )-2/653(** -0/006-0/007-0/010 BETA )-2/172(* )-2/525(* )-3/944(** 0/039 0/ 091 0/ 124 Adjusted R2 970/1 775/1 794/1 Watson camera 647/4 600/6 289/9 F-statistic 00/0 00/0 00/0 Probability of F statistics Discussion and Conclusion The aim of this study was to investigate the relationship between the quality of financial reporting and the quality of auditing companies accepted on the Tehran stock exchange. In this regard, a number of 110 companies to chose time periods. For the quality of the audit of three Auditors in the industry expertise, reputation and the tenure of the auditor of the auditor and the financial reporting to measure the quality of the three Dchu and Dicho (2002), Kotari et al., (2005) and Mac-Nichols and Astaban (2008) has been used. The first hypothesis of research results indicates that between the expertise of the financial reporting and auditor of quality in the industry and there is a significant positive relationship so that by increasing the amount of quality Auditors, financial reporting is an expert in the industry grows. Research results with the findings of the Myers and Mgelof (1994); DOS and Pundit (2010) and Bai and Choie (2012) will be compatible. The second hypothesis test determined that between financial reporting and Auditor reputation quality there is a significant and positive relationship in circumstances that make use of high reputation and credit of Auditors with enhances the quality of the accounting information can be made. The results obtained with the findings of Kim et al., (2003), Zhao and Alder (2004) and Ahsn (2011) all rights reserved. Finally the third hypothesis test results showed that between financial reporting and Auditor tenure and there is a significant relationship. Long term relationships with this means rising auditor financial reporting quality-son of a reduced rate. The results obtained with the findings of the DAS and Pundit (2010), Badaor (2013) is consistent. Control the size of the negative relationship between a variable and a significant participation by financial reporting quality is thus accounting information quality in large companies most of the small companies. Copyright 2014 Centre for Info Bio Technology (CIBTech) 2511

10 Between financial leverage, financial reporting quality growth opportunities contact mtabt and in circumstance where there is a significant increase with the amount of investment and growth opportunities of the company debt, financial reporting and quality improved. Also, the results showed that by increasing the quality of financial reporting, management ownership is reduced. Thus, in companies that the managers have more shares of financial reporting is low quality. More reviews showed that systematic risk and the quality of financial reporting between the negative and there is significant. This means whatever is more systematic accounting information quality risk the company will decrease. REFRENCES Abadi MH and Rezaei GH (2012). Effects on the quality of financial reporting in the benefit management companies accepted on the TSE, the first regional Conference on the new approach to accounting and auditing, Islamic Azad University of Bandar Gaz. Ahsen H (2011). Audit firm industry specialization and audit outcomes: Insights from academic literature. Research in Accounting Regulation 23(1) Badaor Nahandi Y (2013). The correlation between the quality of auditing and investment efficiency, Review of Accounting and Auditing 20(2) Bae G and Choi S (2012). Do Industry Specialist Auditors Improve Investment Efficiency?, Electronic copy Available: Beatty A, Scott J and Weber J (2010). Financial reporting quality, private information, monitoring, and the lease-versus-buy decision, The Accounting Review 85(4) Biddle G, Hilary G and Verdi RS (2009). How does financial reporting quality relate to investment efficiency? Journal of Accounting and Economics Chambers D and Payne J (2008). Audit Quality and Accrual Reliability: Evidence from the Pre-and Post-Sarbanes-Oxley Periods. Working Paper, Available: Com/ abstract = Chen F, Hope, OK, Li Q and Wang X (2011). Financial Reporting Quality and Investment Efficiency of Private Firms in Emerging Markets, The Accounting Review Cohen D and Zarowin P (2010). Accrual-based and real earnings management activities around seasoned equity offerings. Journal of Accounting and Economics 50(1) Cohen D, Dey A and Lys T (2008). Real and accrual-based earnings management in the pre- and post- Sarbanes-Oxley periods. The Accounting Review 83(3) Das S and Pandit SH (2010). Audit Quality, Life-Cycle Stage and the Investment Efficiency of the Firm, Available: Dechow P and Dichev I (2002). The quality of accruals and earnings: the role of accrual estimation errors. The Accounting Review Francis JR and Wilson E (1988). Auditor changes: a joint test of theories relation to agency costs and auditor differentiation, The Accounting Review Gomariz MFC and Ballesta JPC (2013). Financial Reporting Quality, Debt Maturity and Investment Efficiency, Journal of Banking & Finance. Jacob Nejad A and Amiri M (2009). Factors affecting the quality of the audit reports and the impact of the aforementioned factors and price change correlations the coefficient dividend changes, Financial Accounting and Auditing Journal Jensen M and Meckling W (1976). Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial Economics Karamanou I and Vafeas N (2005). The Association between Corporate Boards, Audit Committees, and Management Earning Forecasts: An Empirical Analysis. Journal of Accounting Research 43(3) Kothari SP, Leone AJ and Wasley CE (2005). Performance matched discretionary accrual measures. Journal of Accounting and Economics 39(1) Li Q and Wang T (2010). Financial reporting quality and corporate investment efficiency: Chinese experience, Available: McNichols M and Stubben S (2008). Does earnings management affect firms investment decisions. The Accounting Review Copyright 2014 Centre for Info Bio Technology (CIBTech) 2512

11 Myers S and Majluf N (1984). Corporate investment and financing policies when firms have information that investors do not have. Journal of Financial Economics Roychowdhury S (2006). Earnings management through real activities manipulation. Journal of Accounting and Economics 42(3) Copyright 2014 Centre for Info Bio Technology (CIBTech) 2513