Integrity, auditor independence, and the interests of

investors

Mohamad hasan zade

Islamic Azad University Germi
Masumeh amirabadiyan
Islamic Azad University Germi
Abdolali mohseni

Electronic copy available at: http://ssrn.com/abstract=2536343

Abstract
The present study discusses about the integrity and independence of the auditor,
and the interests of investors, in line with the theoretical foundations. The present
study is a descriptive and applied research. Given the scope of spatial and temporal
study population included all independent auditors, members of Iran's official auditor,
and thus, the sample in this study is 90. To investigate the relationship between the
variables of the study, the integrity and independence of the auditor (independent
variable), and the interests of investors (the dependent variable) were considered, and
the relationship of each of these indicators together, were examined. Thus, two
hypotheses were developed, and the relevant data were collected. SPSS22 software is
used to evaluate hypotheses in this study. Also, this study was to evaluate the
association between variables, including the integrity, independence and interests of
investors, we used one-sample t-test, correlation, and regression eventually.
According to the analysis, the variables and their indicators, we have demonstrated
that there is a positive correlation between the integrity and independence of the
auditor, and the interests of investors. Finally, a detailed presentation of the results
and findings of the study were summarized, and recommendations related to auditors
and experts, and continue pursuing similar research in the future, are provided.
Key words: honesty auditor, auditor independence, the interests of investors

Electronic copy available at: http://ssrn.com/abstract=2536343

2.Introduction
The possibility of bad faith in the preparation of these financial statements, the
Board of Directors, led to the need for the audit profession, and people in the name of
the auditor, felt. Audit is the process of collecting regular and impartial assessment of
the evidence, allegations of economic events, in order to determine the validity of the
claim, together with the predefined criteria, and submit a report to Dinfan. The role of
the independent auditor is to show the financial statements have been prepared
according to generally accepted accounting principles, because it can be inferred that
the financial statements have been prepared jointly by the for-profit and independent
auditor. The purpose of the audit of the financial statements, is that auditors can not
comment on that, whether the financial statements have been prepared using the all
important aspects, in accordance with accounting standards, or not (Darabi and Jafari ,
2012).
On the other hand, accounting scandals has been, to clarify questions on ethical
issues related to the auditors, and as a result, their reputation. As a result, public
confidence in the accuracy of the services provided by the auditors is impaired.
What's more, since, audit, specifically relies on trust and strict enforcement
responsibilities, the importance of moral judgment to the profession, is essential.
Major scandal, Arnon, indicated the role of auditors, and led to the adoption of
stronger rules. Therefore, led, strengthening trust, auditors should follow it, to show
of honor, the honor. The criticism increased, because it is not enough to rely on the
accuracy and relevance of financial data, however, the auditor should consider the
broad impact of the audit report, the beneficiaries of the third sector, to maintain
public confidence. When the trust of shareholders, change, restore the trust placed in
priority, because, perceived lack of commitment, which leads to the common good,
and pitting the public's expectations of audit (Redlin, 2013).
In this study, we were looking at it, is the relationship between honesty, auditor
independence, and the interests of investors. It seems the answer to this question can
be effective, responsible and non-responsible for corporate executives, and actual and
potential institutional investors, and independent auditors. Because, with the
knowledge of each of the factors affecting the interests of investors, to facilitate a way
for pre-emptive measures, fraud and non-compliance with ethical principles,
especially for corporate executives and auditors.
Three Reasons to audit
Public accounting, is a professional who provides services to the public, especially
in the field of audit and financial reports submitted by the client. Audit, at first, was
used to meet the needs of users of financial information, such as investors, creditors,
prospective creditors, and government agencies (Boiton et al., 2006). As a
professional, people trust it, it needs to, public accountant, according to the results of
the audit, the accounting scandals that occurred in American corporations, like Arnon
and World Com, destroyed public trust and credibility, and therefore, it also has been
much criticism of the business (Fornen and Clark, 2002).
3

But, why do we need to audit? According to Wallace (1980), the need to audit, is a
3-dimensional object: it is defined as an activity, as a regulatory mechanism,
eliminating the need for information to be obtained, from investors to improve their
decision making, and to act as a guarantee, the major distortions. Pentland (2000),
defines the necessary items needed to audit as a control mechanism, which is
important, more than ever, need to audit during the 21st century, as a control
mechanism, to face the world financial crises and scandals led to requests for more
regulation, and regulation of companies will rise. Auditing can be regarded as a
strategic function of the company, with the aim of ensuring the issued financial
statements to shareholders, and enhance the credibility of the subject of auditing
(Power, 1999).
Clues in the big scandals, the audit are often blamed, which in the end, this leads to,
stricter regulations, with the aim of enhancing audit quality. Regulations, audit and
accounting services (eg, IFRS & ISA), have tended to produce the upward pressure on
pricing audit, and the increasing complexity of the audit (Kim Liu and Zhang, 2012).
Also, it has been argued that increased regulation could affect the price of the items
audit services company. Research results show that, the customers, the additional
costs (or vice versa), previously introduced, the Audit compensation and total
compensation next year, after the introduction of a lower (higher). These findings
show that the disclosure of the audit fee had a positive effect on the accuracy of
pricing audit (Ask and Holm, 2013). In general, three main hypotheses proposed, to
require an audit (Lem, 1998). These three hypotheses are:
2.1 Representation theories
this hypothesis refers to the role of auditing plays a role in reducing the problems
and risks undermining the morals. According to agency theory, the auditor is, in the
context of the relationship between the agents - the owner, an integral part of the
contract mechanism, which is created for the control and supervision of the director of
the agency costs. According to Jensen and Mac Ling (1976), the representative (s), is
about the internal operations of the company, the owner, assuming the manager, is
looking for self-interest, and has been used, the company supplies more than
desirable, and tries to transfer wealth from owners, to win. According to this theory,
the organizations, information asymmetry is higher, the auditor needs to be more
work and effort. According to Wallace (1987), the closest concept to asymmetric
information, the terms of complexity, that most benchmarks, researchers have used to
measure it, is a subsidiary of the same address. Auditing Standard 53 America states:
"The organization that operated without adequate oversight of its operations, and
decentralized, will have a very high risk." In fact, the risk of ignoring ethics, seen,
more decentralized units (Rajabi et al., 2008).

2.2 Hypothesis trust

based on the assumption of trust, auditor, helps to decrease the wrong decisions in
the capital market, the investor tries to choose a reputable auditor, to show to the
capital market, the operation is transparent and appropriate. Potential investors also
take advantage of these features for your investment decisions. There are similar
criticisms, the representation theory. Justify this hypothesis, the pricing of audit
services, which is so large and reputable audit firm, they demand from their
employers, higher fees, because such institutions, are of high quality and reliability,
with investors and society, and as a result, they bring transparency and performance
more suitable for the company (Nikbakht and Tanani, 2010).
Hypothesis 2.3 Accreditation
Accreditation is based on the assumption that the ratio of the two previous
hypotheses, little attention has been, researchers and theoreticians, may audit
profession, it is claimed, there is no liability for the validity of the results and the
financial statements, but in on the other hand, investors believe that, if the loss is
entered as a result of misleading financial statements, auditors, it must pay the
penalty, and compensate for their losses. Therefore, it is possible, in some cases, the
harm to investors, auditors, are held accountable. As a result, the auditor should not
consider the risk in pricing their services, and the results of operations of the
company, is weaker (lower profitability or losses of tens of) the risk increases,
consequently, the audit fees, increases. In practice, a combination of the assumptions
used, in accordance with the terms of the cultural and legal environment, and in a
country, this may be one of them, offer a better explanation than others. But the
hypothesis representing the interests of the audit, the meet director, and therefore, a
director, to the extent that it considers itself accountable, responsible for his (or he is
forced to respond) is present, the fees for audit services. This aspect, that is, the aspect
of the demand for audit services, has received little attention, and often, researchers
have found that research in the field of audit fees, review, and audit of its services. It
seems, one of the main reasons it is difficult to measure and quantify the
responsibility to meet director (Lem, 1998).
4. The auditor's role in the market and their legitimacy
Given the current business environment, and conflicts of interests between owners
and users of information, there is a tool to ensure the preparation and presentation of
information is essential to the cause of improving data quality. To this end, audit, of
the tools, review, information provided, based on pre-defined criteria, and offers the
results of their work, in the form of reports, which use data, benefit from it, to have a
wiser decision. A very important task, the assessment of economic and financial
information, in different countries, it is assigned to, and independent auditing.
Independent auditors, do it, with comments on the financial information, in the form
of audit reports. Presentation comment on the specific, generally, the concept is clear,
5

largely, to all users, including investors. Therefore, the audit report, is indicative of
risk information (claims conformity with reality). Audit report, as the end product of
the audit, the general nature of the product (service), which means it does not preclude
the use of other public services, and it is monopolized by any one user. Public goods,
like other goods and services, must be of good quality, the demand for it, is
continuing. If auditing is a monitoring device, which is responsible, mentioned several
roles, so assuming all other things equal, the financial statements, which have been
audited high quality, will have a greater ability to rely on and trust users of this
service (Gholami et al., 2013).
In total, the auditor's role in society is to provide guarantees for third sector
stakeholders, to express, company reports and financial statements are fairly reflect
the true performance of the company. In order to perform this role, it is essential that
the independent auditors, the attending companies (Lavin, 1977). If the owners of the
organization, they have doubts about the independence of auditors, the financial
statements, are valid, something that leads to the sudden departure of capital and
interest, is suspected of businesses (ABI, 2002). However, the dependence is at the
heart of the auditing profession, the issue of auditor independence, can go back to the
nineteenth century (Chandler and Awards, 1996). Since then, accounting profession
particularly that of the standard system, it is necessary to eliminate the conflict, and to
ensure the independence of auditors. In Great Britain, concerns about auditor
independence, is the result of corporate scandals and the decline in 1980 and 1990.
These scandals, provoked, academic appeal, the issue of auditor independence, and
caused changes in the structure and legislative declaration (Dart, 2011).
5. Variables
5-1-Auditor independence meters
Independence is the essence and spirit of the audit and non-audit independence, has
no value or meaning. Independence, in Webster (1986), defined as the freedom of
others or other effects, check, or will. In this section, we refer to the various
definitions offered by independent auditors, in several studies, and by different
authors:
- De Angelo (1981) says, an auditor, independent, able to publish a report on their
audit, in accordance with his or her true opinion;
- Knapp (1985), considers the independence, ability, strength, pressure against the
owner;
- Carrie (1976) argues, independence, in the simplest sense, is that the auditor, to tell
the truth, as we have seen, and let no stimulus, whether physical or emotional,
removing him from the path;
- Magi and Tseng (1990), that, if there is no independence, auditor's judgment, would
not be consistent with the faith, the reporting policies of the owner;
6

- Lee Interview (1998) considers independence, the absence of collusion between the
auditor and management of the company owner. International Federation of
Accountants (2001), Independence, has two dimensions. The apparent independence
(independent auditor to look), and the autonomy of (the auditor is independent, in
fact);
- Defined by the AICPA (1985), the Association of Chartered Accountants in England
and Wales (1995), the Association of Chartered Accountants of Canada (2000), the
Association of Independent Auditors Australia (2001), and the Society of
Management Accountants, UK (2001) on the independence, similar the definition of
the International Federation of accountants, the securities and Exchange Commission,
New York, knows independence, mental state, neutrality and impartiality, the two
aspects of internal and external independence;
- Doruse and Nidels (1985), comparing their independence, in eleven countries,
France, the Netherlands, Switzerland, the UK, Germany, Jordan, Kuwait, Canada,
Mexico, the US, and Japan, and came to the conclusion that, with the exception of
Switzerland, other countries, seriously, the appearance of independence, and the
independence of the internal auditor;
- Hall and Renner (1991), argue, though, the inner aspect of independence is not
visible, but when, negligence and negligence of the auditor, appears to be evidence of
a lack of independence of internal obtained (Sajjadi and Ebrahimimand , 2005).
Sosenov (2013), is of the opinion that the auditing profession, independent attitude
measures should be separated from the service, the owner of the work. In this
connection, the independence of the auditor, is the meaning of independence to the
information provided by the owner. Auditor independence, the principle is the attitude
of mind, which is characterized by individual approach, the integrity and objectivity
professional duties. Bartlett (1993), declared the independence of the auditor, as an
attitude of mind, which does not show itself unwilling to any position in the audited
financial report. From different perspectives, which are mentioned above, can be
understood that the independence of the auditor, the absolute approach, which should
be protected and owned by the auditor, independence, according to maintain
appropriate behavior at work, and so Thus, the independence of maintaining its image
as a group, supporting the community's trust. Public accountants, who are doing their
audit activities, should do their independence, while maintaining the integrity and
impartiality in carrying out professional responsibilities (Ahrens, 2012).
5-2 honesty auditor
The concept of integrity, ideally, is defined as a good character, and also takes it,
not fear it. Honesty, causes the different ethical positive behaviors seen in humans,
while the lack of this option will make everyone, commit, numerous errors. In
addition, the word integrity, constitute the major part of the mission statement of the
values of an organization, which is often referred to, professional codes of ethics,
7

code, run, or even emphasized that, advertising agencies. For many people, honest is
much more important than money, and easily understandable that people's moral
values, affects, financial decisions (Becker, 2009). Two prominent ethicists
businesses, Robert Solomon (1999), and Richard George (1993), developed the
concept of virtue (such as honesty), an overlooked component for business ethics.
Acting with integrity is in accordance with the regulations, the approach because it
involves behavior that is higher than the minimum morality. Spirit approach to
compliance with laws, is to see how close to the minimum of ethics, (often legal
restrictions, count), a person can go through it, but, honestly, it is necessary to decide
on what extent, a person must be higher than the minimum, in certain situations.
Honesty is different from the approach in accordance with the regulations, in another
way, because the norms that the person does not comply, it is self-imposed, rather, it
is applied by the external sector (including law enforcement) (James c. Ga, 2013).
5.3 Benefits Investors
However, there has been little discussion outside the scope of regulation of
securities markets, the protection of the interests of other investment management is a
key issue in many years. Arthur Levitt, Chairman of the Securities and Exchange
Commission, sees the need for the protection of investors, in the late 17th century,
when the official stock exchanges, for the first time, in England, was recognized. A
few years later, the South Seas bubble, which in early 1710 was a huge financial
fraud, proves this. The scandal was very widespread and damaging, because it makes
the end joint stock form of organization of business (which was the forerunner of
modern companies) over one hundred years, finally, the need for access to huge
amounts of capital, for shipping companies, caused by the emergence of corporate
form of organization in England with company Law of 1844 and 1845. However, the
law requires the audit of the balance sheet, in order to limit the ability of management
to commit fraud (James C. Ga, 2013).
6. Literature Background
Nikbakht and Mehrbani (2006), who studied the effect of non-audit services and
the fees of the audit firm, on auditor independence. The results of this study showed,
providing design and implementation of information systems, and HR services
(recruitment of executive staff), from the perspective of accountants, creditors, and
investment managers, undermined the independence of the auditor, and the views of
managers investors and creditors, to the merger or acquisition, can be altered to
auditor independence, and voice services, brought about a kind of shareholders, and
tax advice, from the perspective of creditors, violates auditor independence, which in
turn, the analysis of all data collected in connection with this hypothesis, suggests that
non-audit services, the total does not violate the independence of auditors.
Gholami, Najaflou and Zangiabadi (2013), examined the extent of the audit report
to investors, in exchange, they pointed out, audit report, can be considered as an
8

approval stamp, in terms of investment, that is, Accreditation to the financial

statements, and it is effective investment decisions. Moreover, those who are familiar
enough with the audit report, believe that the audit report, providing information
efficiently and reliably, to the financial statements. Furthermore, the findings indicate
that there is a significant relationship between gender, education level, field of study,
and the record of scholarship, with the use of audit reports.
Bagherpour & Lashani, Saee, Moshkani, Bagheri (2012), the study predicts the
independent audit report, Iran: a data mining approach. To predict the network, the
independent auditor's report, the three classification techniques include data mining;
decision trees, neural networks, and logistic regression were used. The results show
that the average accuracy of decision tree technique to correctly classify audit reports,
the higher is the technique of artificial neural networks and logistic regression.
Kamali Kermani, Talebi, Ansari (2013), who studied the effect of conducting audits
and non accounting services, academics and analysts' views on the possibility of
exchange. They were of the opinion that the lack of proper positioning of the external
auditors, the audit report led to the fundamental criticisms of the auditing profession
in the world (to protect the interests of shareholders and stakeholders). In this context,
auditors should not only be truly independent, but must be independent to come in
and accredited handle on the financial statements.
Dart (2011) examined the perceptions of investors from Great Britain, the auditor
independence. The results of this study indicated the confidence of investors in the
financial statements provided by companies. The majority of the investment is of the
opinion that the investment they are maintained by the ethical standards of auditors.
Also, the results of nonparametric tests showed that there is no distinction between
gender and perceptions of auditor independence, but the ones that did not have
accounting records, and private investors, had more concerns about auditor
independence.
Sosenso (2013), a review of the literature on the impact of independence, and the
General Accounting Office, the audit quality, and its impact on the reputation of the
Audit Office. In this study, the independence shown by the indicator, the integrity,
and the goal is for the General Accounting Office, and researchers are analyzing it,
with three parameters: the number of branches, number of partners International, and
so on, the ownership of audit staff. He said efforts to maintain and improve audit
quality, is one of the key factors in maintaining stability in public accounting.
Business can be strengthened through the implementation of an independent approach
to the audit, the General Accounting Office, the General Accounting Office and
reputation.
Redlin (2013), reviews audit ethics, and its impact on public confidence. The
results suggest that the increased efforts of Auditors, show little public confidence.
Also, increased regulation, and so on, communications between the auditor and the
9

legislative body may have a positive impact on public confidence. Consequently,

more attention to ethical issues stems from greater attention to quality.
Chen and colleagues (2013) examined the effect of reducing fraud auditors, the
Chinese company, which is known to lack of legal stimulants, low support from
investors, with strict controls on trade and media units, this field. In this study, they
were in search of investigating the matter, that the auditors, help to reduce fraud
companies in China or not. Because, in the past decade, a wave of corporate scandals
and fraud, are offended, investor confidence, and have led to increased volatility in
financial markets in many countries. They finally announced that, corporate fraud; it
can reduce the confidence of foreign investors and capital market stability, which, in
turn, sought to decrease the development of emerging countries.
James C. Ga (2013) examined the integrity, independence of the auditor, and the
protection of investors. He said, lays in the basic principle of public securities markets
in many countries, is that the interests of investors, should be provided. It is thought,
independence of the work (ie, the management of the work), will likely keep interest
investors more than auditors. He said, if it is important that auditors act with integrity,
so it seems that it is necessary to change the institutional structure of professional
practice. Improvements in accounting, ethical standards, such as those offered by
Brilof (1990), it may be necessary or not necessary. But obviously, it was not enough.
7. Research Method
7.1 Methodology
Overall, though, if we consider, classified research, according to the study, is the
practical, if, classify types of research is planned based on the nature and methods of
the present study, the nature of, is descriptive and non experimental (field survey),
and the method also, it is considered, correlation studies. Meanwhile, the process of
this investigation is the operation of the library and field research as an integral
component.
7.2 hypotheses
7-2-1- The main hypothesis
- There is a significant relationship between honesty, auditor independence, and the
interests of investors.
7-2-2- subsidiary hypothesis
- There is a significant relationship between auditor honesty, and the interests of
investors.
- There is a significant relationship between the independent auditor and the interests
of investors.

10

8.3 The sample

The research, are all independent auditors, members of the Iranian Association of
Certified Public Accountants. Sampling is random, and the sample size, to be
determined by this method. In addition to this, the sample in this study, given the size
of the population, including 90 women, to estimate the number of samples, according
to the scale variables hypothesis of this study, we use the following equation:

Z1 = 95% confidence level

N = population size
d = sampling error
1 = population Variance
The study, to be sure, 10 percent more than the estimated sample size was selected,
after the elimination of incomplete questionnaires, and redundant data, the number
has risen to 90 scales.
8-4- collection and data analysis
In this study, after determining the primary and secondary hypotheses of the study,
according to the variables of the study, completed a questionnaire designed to collect
data and test hypotheses. Thus, measuring the survey questionnaire, carefully and
refer to books, as well as interviews after consultation with the advice and
clarification of questions, and supervisors of its reforms After final approval,
reproduced, and distributed among the people, therefore, we can say that, gauges, this
study is a good narrative. Other reliability or reliability of the measurement is
calculated using Cronbach's alpha, which is as follows:
Table 1), Cronbach's alpha for each variable
Reliability Index
coefficient
.885 Auditor independence

Row
1

.845 Integrity Auditor

.848

Interests of investors

.863

The reliability index

11

9. Analysis of Data
9-1- distribution of the independent variables
Table 2), the gender distribution of the sample
Percentage cumulative
frequency

Frequency

Male

79

87.8 87.8

Female

11

12.2 100.0

Total

90

100.0 cumulative
frequency

Table 3) educational level sample

Frequenc
y

Percentag cumulative
e frequency

BA and lower

56

62.2

62.2

MA

31

34.4

96.7

3.3

100.0

90

100.0

PHD and higher

Total

Table 4), the age distribution of the sample

Under 25 years

Frequen Percenta cumulative frequency

cy
ge
7
7.8
7.8

25-34 years

22

24.4

32.2

35-44 years

38

42.2

74.4

Over 45 years

23

25.6

100.0

Total

90

100.0

Table 5) distribution of sample work experience

12

Frequency

Percentage cumulative
frequency

Under 10 years

35

38.9

38.9

10-20Sal

30

33.3

72.2

Over 20 years

25

27.8

100.0

Total

90

100.0

9-2- test hypotheses

First hypothesis: there is a significant relationship between auditor honesty, and the
interests of investors.
H0: There is no significant relationship between the auditor and the interests of the
investors' trust.
H1: There is a significant relationship between the integrity of the auditor, and the
interests of investors.
Table 6) Pearson correlation coefficients for the first hypothesis
Significance
level

.000

Pearson

Number
Views

.448

of Pattern

The
90 hypothesis

first

Because, as the level of significance, the Pearson correlation coefficient is less than
0.01, therefore, there is reason enough to reject the hypothesis at the 0.01 percent
level. Also, the Pearson correlation coefficient, 0.448 indicates the number of positive
impact the integrity of the auditor, the interests of investors.
The second hypothesis: there is a significant relationship between auditor
independence, and the interests of investors.
Ho: There is no significant relationship between the independent auditor, and the
interests of investors.
H1: There is a significant relationship between the independent auditor, and the
interests of investors.
Table 7), the Pearson correlation coefficient for the second hypothesis

13

Significance
level

Pearson

.001

Number
Views

of Pattern

The
second
90 hypothesis

.352

Because, as the level of significance, the Pearson correlation coefficient is less than
0.01, therefore, there is sufficient reason to reject the hypothesis H0, at 0.01 percent.
Also, the Pearson correlation coefficient, 0.352 to figure demonstrates the positive
impact the integrity of the auditor, the interests of investors.
But in general, obtained with the Pearson correlation coefficients, we can say that
the end result is that in this case:
Table 8) Pearson correlation coefficients for variables
Significance
level

Pearson

0.000
0.001

Number
Views

of Pattern

.448

90 Auditor Honesty

.352

Auditor
90 independence

According to coefficients presented in Table (8), it seems, there is a higher correlation

between auditor Honesty and interests of investors, compared with auditor
independence, and the interests of investors. In addition, the table (4-8), multiple
linear regressions, shows, derived factor-beta, for Honesty, independence is higher,
and it shows the importance Honesty, the interests of investors.
Table 4-8) Multiple Regression Result
Model

Beta

Sig.
.000

(Fixed)
Honesty

.713

.000

Independence

.341

.001

14

10. Conclusions and proposal

In sum, it seems the main reasons for this, it is that, in general culture and norms,
honesty can be a deterrent for auditor independence. Fact, it can be present in
discussions and other areas. Today, more attention to ethical issues, such as honesty
and integrity, is a central issue of the human sciences, in many areas. In general,
measures in accordance with ethical principles, compared with only in accordance
with certain rules, can be of assistance, in the interests of investors. Therefore,
auditors can be encouraged to do honest work. On the other hand, auditors have a
duty to look at the community as a whole, and not just investors. Audit, to be
considered, such as a job and so, self-regulation placed as part of a social contract
between business and society, to their mutual benefit. The results of our study showed
that there is a significant relationship between auditor independence and integrity, and
the interests of investors. In the meantime, the correlation coefficient greater openness
variable, we can say, honestly, is a more important factor than the interests of
investors. In this connection, Hassas Yeganeh (2012), in their study, declared that the
conflict of interest between owner and manager, affects the use of the independent
auditors' report, for making public enterprises, public institutions, and banks.
Barzideh and Kheirollahi (2011), were of the opinion that, in the face of Auditors, the
evidence is inconsistent with the findings of the audit process, accountability, audit
work performed, and the pressure led to concerns, the lost reputation, and
concealment of evidence, the auditor is likely to increase.
Newman (2009) believes the disclosure of information, and information provided
by other analysts, and the integrity, influence on the decisions of financial analysts.
Dass and Pandit (2010), evaluated the effectiveness of audit quality, and efficiency of
investment, announced, audit quality, and reduce inconsistent information, which
prevents investment. James C. Ga, (2013) stated, the integrity and independence of
the auditor, is a major factor in the interests of investors. He argued that, investor
protection requires that auditors, have integrity, or proper conduct themselves. Redlin
(2013) also believed that auditors should consider the social and public duty, to
increase the value. As a result, better morals, the answer may be, to win back public
confidence in the accounting profession. Chen et al (2013) also found that,
companies, executives, they were less honest, have done more manipulation, profit,
and further legal action; do not show the company fraud.
11 comments
- It is recommended that the certified public accountants, through the appropriate
legal framework, and show greater sensitivity towards meeting the independence of
statutory auditors;
- It is recommended that the certified public accountants, to improve the quality of
audit reports, promote and ensure the community's expectations of audit work
product;
15

- Recommended to the directors and officers of the Tehran Stock Exchange, to find
ways to take action, in order to reduce information asymmetry and improve
investment, and greater supervision over the quality of audit reports;
- It is recommended to auditors, to act carefully and delicately, in reviewing financial
reports, and avoid the presentation of the reports, which leads to the loss of investor
confidence;
- Recommended, the audit, accounting and auditing standards as trustee in Iran,
according to the findings of this study, special attention to the importance of factors
influencing auditor independence, and take action in this regard, and designed
auditing standards;
- Another proposal of this study is to entities that perform professional services audit.
As you can see, the independence and integrity of the audit, has a special effect on the
interests of investors. Audit Office, members of the Iranian Association of Certified
Public Accountants, and the GAO, which are accounted for, various government
agencies, corporations, and private enterprises should pay more attention to these
factors, to evaluate the effects of these variables on the distortion the audited financial
statements.
- It is recommended to investors in the stock market; they have more interest in the
audit reports, and consider the integrity and independence of auditors, as possible.
12. Limitations of the study
Although the present study, both theoretically and practically, are useful, but there
are limitations. First, the questionnaires filled by people who are eager to fill it.
Second, the questionnaire method, there is no problem for investigators, lack of
control over the decisions of those polled, the provision of or failure to provide a
response. Finally, this study found a higher concentration, the customer experience,
and previous knowledge of them, instead of anticipating and identifying future.
Questions are in connection with their current experience. However, it should be
noted not only the past and present factors must also be examined, other factors that
could potentially affect the variables in the future.

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