The Analysis of the Economic Effects of Audit Activity in Industry Level

It is expected that audit activities enhanc the transparency, quality and reliability of financial reports. So they can provide better condition for more adequaite decition making by economic agents and lead to improve the economic firm's performance. The aim of this paper is to investigate the effects of audit activities on economic firm's performance in Iran manufacturing sector.
In this paper, the effects of audit activities on manufacturing establishment performance variables have been studied using panel data approach during period 2004-2013. The research findings reveal that audit activities have significantly affected the production growth rate, profitability, investment growth, investment efficiency and labor productivity in large manufacturing establishments. According to the findings, 1% increase in audit costs growth rate leads to 0.33% increase in production growth rate. Furthermore, 1% increases in audit costs rate leads to 0.04% increase in profitability, 0.27% increase in incestment, 0.06% increase in investment efficiency and 0.11% increase in labor productivity in manufacturing establishments