Effect of Audit Report Delay on Fluctuations of Stock Prices of Companies Listed in Tehran Stock Exchange

Document Type : Research Paper

Authors

1 Department of Economics, University of Mohaghegh Ardebili (UMA), Ardebil, Iran

2 Assistant Professor and Faculty Member of University of Guilan.

3 Department of Economics, Tabriz Branch, Islamic Azad University, Tabriz, Iran

Abstract

In general, independent auditors provide the context and conditions for the quality of timely accounting information and financial reporting. Hence, delays in presentation of audit reports can affect the company's performance and even company stock prices. Therefore, the main goal of the study is to investigate the effect of delay of the audit report on stock price fluctuations among 110 companies Listed in the Tehran Stock Exchange during the period of 2012-2017 using the GARCH model. The results of the model estimation showed that, firstly, the coefficients of the equation of conditional variance are significant. In other words, the model's oscillation is confirmed. Also, based on the results of the estimation, the maximum likelihood of the simultaneous effect of all variables is confirmed, in other words, it does not indicate the high and false validity of the estimated regression model. The results of the hypothesis test also showed that the main hypothesis of the research about the effect of the delay of the audit report on stock price is confirmed. So, the companies whose audit report was presented with delay, their stock prices on average were also lower. Other results showed that the coefficient of financial variables is not significant, but the firm ‘size has a significant negative effect on the stock price.

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Main Subjects

References

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Journal of Accounting and Social Interests
Volume 9, Issue 2 - Serial Number 33
September 2019
Pages 81-98

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History

  • Receive Date: 21 April 2018
  • Revise Date: 19 July 2019
  • Accept Date: 11 August 2018

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