The Impact of Audit Quality and Profit Quality on Stock Prices - An Empirical Study on Companies Listed on the Egyptian Stock Exchange

The purpose of this paper is to investigate the effect of both audit quality and earnings quality on stock prices of companies listed on the Egyptian stock exchange. To test the hypotheses, the researcher used a sample of 479 observations derived from companies listed on the Egyptian stock exchange during the period 2016 through 2019.
The results of basic analyses show a positive significant effect of earnings quality on stock prices. However; the researcher finds a negative insignificant effect of audit quality on stock prices. the researcher also finds that the degree of financial leverage, as a control variable, has a positive significant effect on value relevance. Although, the researcher finds a positive significant effect of firm size, as a control variable, on stock prices.
In addition, results of additional (or supplementary) analysis show that using degree of financial leverage as a moderating variable has no significant effect on the research hypotheses. This result supports using degree of financial leverage as a control variable not as a moderating variable, as examined in our basic analysis.  
Finally, results of sensitivity analysis find that results of our basic analysis are valid, especially in the field of the relationship between earnings quality and stock prices, either separately or jointly with audit quality.