Financial Restatements on Auditors’ Job Mental Pressure: A Test of Tournament Incentives Theory
نویسندگان
1 Department of Accounting, South Tehran Branch, Islamic Azad University, Tehran, Iran
2 Department of Accounting, South Tehran Branch, Islamic Azad University, Tehran, Iran
3 Department of Accounting, Kish International Branch, Islamic Azad University, Kish Island, Iran
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چکیده
According to the agency theory, in order to reduce the agency conflicts and problems, the appropriate control mechanisms must be adopted so that the CEO steps towards the shareholders’ interests and helps them to improve the transparency of financial reporting and reduce the financial restatement. Under this condition, in addition to increase the level of transparency and decision making power of the shareholders and investors, the auditors’ mental pressure level regarding the corporate financial performance is also increased. This causes that the reports can be presented more timely without the need for yearly financial restatements. The purpose of the present research is to study the effect of financial restatements on auditors’ job mental pressure by mediating the CEO’s tournament incentives. A total of 97 companies in Tehran Stock Exchange were surveyed between the years of 2014-2018. In order to test and analyze the research hypotheses, multiple regression relying on testing classic hypotheses was used. The results showed that financial restatement has a positive and significant effect on auditors’ job mental pressure. Also it was found that the CEO’s tournament incentives reinforce negatively the positive effect of financial restatement on auditors’ job mental pressure.
