The relationship between the quality of auditing and financial reports: An applied study on companies registered in the Egyptian Stock Exchange

Document Type : Original Article

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Accounting Department Faculty of Commerce Alexandria University Alexandria Egypt

Abstract

Effective capital markets raise the quality of financial reporting, making it easier to collect and allocate capital to more efficient companies, which benefits investors (Wang and Wub, 2011).On the other hand, the global financial crisis and the failure of companies in many countries have raised questions about the effectiveness of the audit process, and therefore audit facilities and regulatory and professional bodies have made efforts to restore confidence in the audit process.Regulators have tried to reinforce audit efforts in an effort to remedy this distorted image and work to increase its legitimacy (Holma and Zamand, 2011).The classic agency problem between shareholders and corporate managers requires the presence of auditors who provide independent assurance to investors that the company's financial statements are prepared in accordance with generally accepted accounting principles.However, the global financial crisis has brought failure and scandals to many companies in many countries, raising doubts about the effectiveness of the audit (Kaklar, 2012).The global financial crisis showed the importance and necessity of preparing high-quality financial reports.

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