M.A. Thesis:

Audit Opinions and Earnings Persistence

Abstract: The purpose of this study is to study the relation between auditor’s opinion and the stability of company’s profits. To test the hypothesis, multivariate regression model and panel data have been used. This study’s duration includes years 1389 to 1393. The studied samples include 102 companies accepted in Tehran’s Stock Exchange and 510 company- year observations. According to the research results and statistics tests with a 5 percent error possibility it can be said that the adjusted opinion has a negative significant with the profit stability. As a result the adjusted comment, decreases the profit stability and there is less profit stability in companies which receive adjusted opinions than those which receive accepted opinions. As profit stability in companies that receive adverse or no opinion is less than companies which have presented qualified opinions, the second hypothesis is not supported.

Keywords: Auditor’s opinion, Profit Stability, Audit Adjustment, Accepted opinion, Unqualified Opinion, Qualif