Investigating the Relationship between Quality of Accruals and Cost of Debt, with Emphasis on the Quality of Audits in Companies Listed on the Tehran Stock Exchange

Alireza Saffari, Mohammad Ghasemi



In this study, the relationship between quality of accruals and cost of debt, with emphasis on the quality of audits in companies listed on the Tehran Stock Exchange has been studied. The size of company and the rate of return on assets are considered as control variables. The number of companies in the present study that during the study period of 2008 to 2014 have been selected of the companies listed on the stock exchange which contains of 107 companies with a total of 749 samples per each variable. This study examined three hypotheses that the results of the test of the first hypothesis by using "multiple regression analysis" suggests that there is a significant inverse relationship between audit quality and cost of debt in companies listed on the stock exchange. Also, the results of the second hypothesis by using "multiple regression analysis" suggests that there is direct relationship between the quality of audits and accruals quality in companies listed on the stock exchange. The third hypothesis test results also indicate that there is negative correlation between accruals quality and the cost of corporate debt in companies listed on the Tehran Stock Exchange. Main hypothesis test result showed that quality of audit, would intensify the reverse relation between the accruals quality and cost of debt.


audit quality, quality of accruals, cost of debt, the size of the company, return on assets.

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