The Impact of Abnormal Accruals On Auditor Reporting

We exmine the relationship between earnings management، measured by Abnormal accruals and auditor reporting، measured by type of audit firm and audit opinion. Our sample comprises of firm، listed on the Tehran Stock Exchange، for the period 2005-2011. The results provide no evidence for the relationship between type of audit firm and Abnormal accruals. However، there is a significant positive relationship between Abnormal accruals and unqualified audit opinions، and between big audit firms and unqualified audit opinions for our full sample estimation from the control variables، profitability، current ratio and size are positively related to discretionary accruals. Also، profitability is positively related to unqualified audit opinions. But size is negatively related to unqualified audit opinions. We conclude that big audit firms issue unqualified opinions، in spite of the level of earnings management employed