The Impact of Corporate Governance Mechanisms on Audit Quality

Abstract

This study aims at investigating the effect of ownership structure among Iranian listed firms based on their audit quality. The sample study consists of one 72 companies on the Iran Stock Exchange. The analysis of logistic regression was used to investigate the relationship between the audit quality measured based on the audit firms size as a dependent variable, and Corporate Governance Mechanisms as independent variables. The results showed that there is a positive and meaningful relationship between auditing quality and firm size. Meanwhile, there were no relationships observed between Corporate Governance Mechanisms and auditing quality. We can conclude that the institutional investors and the board of directors are reluctant to employ highly qualified auditors.