The relationship between internal control weaknesses and audit fees with an emphasis on political relations in companies listed in Tehran Stock Exchange

The audit validates financial reports, and, in return, a sum will be paid to the audits as a fee. The basis for auditors' review and assessment of the ability to rely on financial statements is through internal control. The company's political relations can affect the quality of financial statements and affect the amount of audit fees as well as control environment. The purpose of this study is investigate the relationship between the internal control weakness and audit fees, with an emphasis on the political relations in companies listed in Tehran Stock Exchange. The natural logarithm of audit costs is used to measure audit fees. Auditors' reports are also used to measure internal control weaknesses. The data of 114 companies listed in Tehran Stock Exchange from 2012 to 2018 are collected to test the research hypotheses. To investigate the relationship between variables, multiple regression using panel data model is applied. Findings of the research show that there is a positive and significant relationship between the weakness of internal control and audit fees and the company's political relations undermine the relationship between the weakness of internal control and audit fees
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