The Mediating Role of Financial Restatements in the Relationship between Perceived Audit Quality and Firm’s Value: An Applied Study on the Listed Firms in the Egyptian Stock Exchange

Objective:  
   This research aims to study and test the impact of perceived audit quality on firm’s value, either directly or indirectly through financial restatements as an intermediate variable.
Design and Methodology:  
   The research adopted the content analysis approach to exam the financial reports on a sample of 88 non-financial firms listed in the Egyptian stock exchange during the period from 2014 to 2017, with a total of 352 views, logistic regression model and multiple regression model were used, as well as the structural equations model (SEM) based on partial least square (PLS) method using smart PLS program, to test the research hypotheses.
Results:   
    The results concluded that there is a significant inverse relationship between perceived audit quality and financial restatements, there is also a significant inverse relationship between financial restatements and firm’s value, there is a positive and significant direct effect relationship between perceived audit quality and firm’s value, there is a positive and significant indirect effect relationship between perceived audit quality and firm’s value through financial restatements as an intermediate variable, and it is stronger than the direct effect relationship without an intermediate variable.
Originality and Value:
              This study contributes to narrowing the research gap in the accounting literature regarding the relationship between perceived audit quality, financial restatements, and firm’s value. The study also provides practical evidence from the reality of the Egyptian business environment as an emerging economy, of the impact of perceived audit quality on reducing financial restatements and increasing listed firm’s value in the Egyptian Stock Exchange.