M.A. Thesis:

Regulatory mechanism , concentration of ownership and earnings quality

The main purpose of the present study is to investigate the relationship between supervision mechanisms, ownership concentration, and earnings quality, in registered organizations in Tehran Stock Exchange. The statistical sample used in the study includes 132 registered organizations in Tehran Stock Exchange, from 2012 to 2015. The dependent variable of the study is earnings quality. For the evaluation of this variable Mc Nichals’ Model was used, which is a modification of Dechow and Dichev’s Model. In this model, the quality of the guaranteed items is used as a criterion to assess the earnings quality of the organizations. The independent variables are the financial expertise of the manager of internal audit, the independence of audit committee, the age of internal audit section, the size of the audit organization, and the percentage of ownership of share-holders. The method used in the present study is of cause-effect type and of a post-event nature. Hypothesis testing was done via Eviews software and multi-variable regression, based on Panel Data Technique. The results of the study indicate that earnings quality has no significant relationship with the financial expertise of the manager of internal audit, the independence of audit committee, the size of the audit organization, and the percentage of ownership of share-holders. But there is a significant positive relationship between earnings quality and the age of internal audit section. In Iran, the formation of audit committee and internal audit section is a new phenomenon and organizations have been required to have these sections since 2012. Therefore we cannot expect these sections to have a huge impact on earnings quality and financial reports.

Keywords: earnings quality; internal audit; audit committee; size of the audit organization; percentage of own