The Effect of Perceived Audit Quality on The Relation between IFRS Adoption and Cost of Equity: An Evidence From Companies listed on the Egyptian Stock Exchange

Document Type : Original Article

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Accounting Department Faculty of Commerce Damnhour University Alexandria Egypt

Abstract

The Research aims to study and test the effect of Perceived Audit Quality on the relation between International Financial Reporting Standards (IFRS) and Cost of Equity in a sample of non-financial Companies listed  in the Egyptian Stock Exchange (EGX) during period from 2013 to 2019 with exception of (2015) as the year of applying IFRS.
The results of Fundamental Analysis concluded there is a Negative and significant relation between International Financial Reporting Standards and Cost of Equity for the Egyptian companies and, in addition to the Positive and Significant Effect for the Perceived Audit Quality variable on the relation between IFRS and Cost of Equity. Also, the study found negative and significant relation for the Companies Financial Performance and non-significant relation with firm size as a control variables, while non-significant Positive relation with the Leverage ratio.
Based on the Sensitivity Analysis, the Research after changing the main measure for the Cost of Equity variable to be based on the cost of equity instead of stock profitability, found measures used in the fundamental and sensitivity analysis is has same results after change the measurement. This results confirm the researcher  measure for the Cost of Equity as dependent Variable and suitability with Independent and moderating variables.

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