The Effect of the operational characteristics of companies on the relationship between audit quality and quality of financial reports: An Applied Study on Listed Companies in the Egyptian Stock Exchange

Document Type : Original Article

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Accounting Department Faculty of Commerce Damnhour University Damnhour Egypt

Abstract

This study investigates the relationship between audit quality and the quality of financial reports, considering the operational characterristics of companies as mediators of this relationship.To test the research hypotheses, this applying study is conducted using a sample of 93 listed companies in the Egyptian Stock Exchange. This results 206 observations during the period from 2012 to 2015. To analyse the data, Logistics Regression models was used to measure the coefficient of determination of these models and to test the significance of each regression model through the Omnibus Tests.The results of the study show a significant positive effect of the auditing quality on the financial reports. Moreover, the results show that the positive impact of audit quality on the quality of financial reports varies substantially according to the company size, and leverage. The study did not find an evidence that profitability causes substantial variance in the impact of audit quality on the quality of financial reports.

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