The effect of independent auditor's report on profit distribution policy: Evidence from Tehran Stock Exchange

Abstract

Profit distribution is one of the most debatable subjects in financial field. Opposite theoretical models that sometimes, do not have a strong empirical support look for the explanation of corporate dividend policy. In this paper, the relationship between profit sharing policy and auditor`s and managers' expected profit is studied. The study gathers the necessary information of 99 firms listed on Tehran Stock Exchange over the period 2002-2011. The implementation of regression analysis shows that there was more explanatory power of auditors' expected profit than managers' expected profit in dividends. The results also show that there was no meaningful difference between auditors` expected profit and managers` expected profit.

Good Corporate Governance and Integrity of Financial Statement

“…Puspita & Utama (2016) research has come to a similar point with Serly & Helmayunita (2018) that indicated audit fee positively and significantly affected the financial statement. Meanhile, Auliyah et al, (2022), Putri (2021) and Paydarmansh et al, (2014) argued otherwise, in which audit fee does not affect the financial statement. Based on the theories, substantive relationship and results of the previous researches above, this research proposes a hypothesis as follows:…”