AUDITOR’S TENURE AND QUALITY OF PROFIT IN AUTOMOTIVE AND FOOD INDUSTRIES

In the present study, the role of accruals is evaluated in quality of profit in companies accepted in Tehran stock exchange market while the relationship between qualities of profit via accruals is studied with auditor’s tenure. In this study, number of years of auditor’s tenure in an organisation is considered as an index for auditor’s retention. Sample consists of 61 companies involved in automotive and food industry. Results show that when an auditor’s tenure is longer, and more audits are done by the auditor, productivity of company and the quality of profit are increased more. It seems there is a negative significant relationship between auditor’s tenure and bracket of accruals. Any studies can be advantageous for investors and data users regarding the quality of profit and determination of effective factors on its unreal reflection for hidden or unreal profits.

Accruals, Auditor Tenure, Quality of Profit, Cash flow