Reviewing the Relationship between Financial Reporting Quality and Auditor Opinion in Tehran Stock Exchange

The issue of financial reporting quality has attracted a lot of attention in recent years. In this regard, the auditor opinion on financial reporting has particular importance. Therefore, the present study examines the relationship between indicators measuring the quality of financial reporting and auditor’s opinion. Indicators measuring the quality of financial reporting include accruals quality, earnings persistence, the quality of disclosure and the accuracy of financial information; in addition the type of audit opinion has been divided into two categories: the unqualified and qualified audit opinion. The population for collecting variables includes the listed companies in TSE between the years 2003 and 2012. Among the listed companies, a total number of 70 companies have been selected as a sample through systematic elimination. The results of panel logistic regression analysis show that there is a significant positive relationship between some of the indicators measuring financial reporting quality such as earnings persistence and the quality of disclosure and the type of audit opinion, indicating that the increase of unadjusted indicators are in line with unadjusted opinions. Furthermore, there is no significant relationship between the accruals quality and the accuracy of financial information and audit opinion.