Introduction of A Model to State Earning Information Content Using Audit Quality and Internal Control Weakness Indexes

In accounting literature, earnings information content is yet one of the unresolved issues in the financial reporting. In this regard, this study aims to identify elements effective on earnings information content by modelling these elements. Research method is descriptive correlational and quasi-experimental. The sample consists of 122 firms listed in Tehran Stock Exchange over the period from 2007 to 2016. In order to test the research hypotheses, SPSS and structural equation modelling software (PLS) are used. Research results show that audit quality increases the earnings information content. Also, a higher audit quality decreases the internal control weakness. There is a negative relation between internal control weakness and earnings information content. In addition, internal control weakness can play a mediating role in the relation between audit quality and earnings information content. These findings can improve the information content of accounting earnings thorough the audit quality.