The Assessment of the Effect of Competition in Audit Market on Auditor Independence and Quality of Financial Statements in Companies Listed in Tehran Stock Exchange

Establishment of the Iranian Association of Certified Public Accountants and audit market privatization as the new phenomenon in the audit market, are taken into consideration by a number of experts. The purpose of this study is investigating the effect of competition in audit market on auditor independence and earnings quality for the period of 11 years from 2001 to 2011 in 111 companies listed in Tehran Stock Exchange. The methodology of the study is correlation. In order to test the search hypothesis, multiple regression analysis is used. The results indicate that increasing the competition in this market decreases the auditor independence. Also, the results of this study show that with increasing the competition in audit market earnings quality decrease.