The Impact of Audit Quality on Earnings Management: An Experimental Study with Evidence from IPO

According to a method of earnings management activities that administrators can manage reported earnings from the definition of real activity. In particular they can be located across time and activities in a way that accounting period to achieve a certain revenue target.The Purpose of this study was to investigate the effect of audit quality on earnings management realtime IPO companies. In order to examine this issue in Iran, the Number of 52 companies listed on the Tehran Stock Exchange, during the years 2005 to 2013, was studied. The method of correlation, causal and test hypotheses, multivariate linear regression.To measure the real benefit management, from both discretionary and variable costs of an extraordinary surge of cash from operating activities was used. The results show that the stock Market is made to manipulate them for the first time offer a real activity through abnormal discretionary expenditures and operating cash flow abnormal discretionary hand.