M.A. Thesis:

The effect of audit adjustments on earnings quality

Many studies attempt to examine audit quality using measures of earnings quality. In this study, the role of auditing on the earnings quality is being examined. To achieve this goal, examined the effect of audit adjustments on the earnings quality . The effect of audit adjustments are presented from the comparison The audited financial statements with the pre-audit financial statements, and for examine the earnings quality used the smoothness and persistence of earning and accruals quality . This research was conducted on a sample of 116 companies listed in Tehran Stock Exchange during the years 2011-2017. The techniques used, regression, and ratios are used to calculate the smoothness and persistence variables of earnings and accruals quality, and then the comparative tests before and after the audit to examine the role of adjustments. The research findings indicate that downward adjustments are more likely than the upward adjustments, but in terms of the amount, upward adjustments are more significant, and as a result of adjustments, the profit of sample companies during the study period increased by 1/3 % . Also, the test results of the research hypotheses show that there is no significant difference between audited earning and pre-audit earning in terms of smoothness and persistence , and there is no significant difference between the quality of audited accruals and the quality of pre-audit accruals . Therefore, audit adjustments have no effect on the earnings quality of sample corporate.

Keywords: Audit adjustments, earnings quality, earnings persistence, earnings smoothness , accrual quality