Document Type: Original Article
Department of Accounting, Borujerd Branch, Islamic Azad University, Borujerd, Iran
Unqualified audit opinion report takes on a considerable importance in the capital market and typically results in increased stock quotes. Thus, in order to obtain unqualified audit report or reduce audit paragraphs, companies may take measures to influence auditors’ reports. Considering the competitive audit market and companies’ employment of auditors, one of the measures is to change the independent auditors. The present study investigates the effect of independent auditor switching on auditors’ opinions and audit report paragraphs. The study adopts an applied-descriptive method assuming a secondary analysis design. The data was collected through field study whereby notes were taken from Tehran Stock Exchange Market archive. The populations of the study consisted of the companies enlisted in Tehran Stock Exchange Market, which had experienced independent auditor switching in 2010. Kolmogorov-Smirnov test was run to examine the normality of the data. Bimodal test and Wilcoxon test were run to analyze the qualitative data and non-parametric quantitative data, respectively. The results showed that companies with qualified audit opinion reports mostly tended to change their independent auditors; however, auditor switching did not typically result in the inclination of audit opinion toward unqualified reports, reduced audit paragraphs and elimination of annual audit paragraph.