An Investigation of Specialization Impact on Industry & Audit Firm Tenure on Earnings Management (with an Emphasis on Interim Financial Reports) in Companies Listed in Tehran Stock Exchange

This study investigates the impact of specialization on industry and audit firm tenure on earnings management in companies listed in Tehran Stock Exchange. In this paper, 73 companies have been studied between the years 2009-2010. Using linear regression & discrepancy test, the hypothesis was examined. The results indicate that industry specialization and audit firm tenure have a negative effect on earnings management. Additionally, the possibility of earnings management in companies audited by specialized auditors in industry having more than 4 years of audit experience, is different (namely less than) from the companies which are not audited by those auditors.