The effect of audit quality, number of profit forecasts and the Auditor's Opinion on the relationship between the classification shifting and investors' confidence

Sajadi, Zanyar; Akhgar, Mohammad Omid; Abbasi, Pezhman

doi:10.48301/kssa.2025.481719.3017

The effect of audit quality, number of profit forecasts and the Auditor's Opinion on the relationship between the classification shifting and investors' confidence

Document Type : Original Article

Authors

zanyar sajadi ¹

mohammad omid akhgar ²

pezhman abbasi ³

¹ Assistant Professor, Department of Accounting, Faculty of Humanities and Social Sciences, University of Kurdistan, Sanandaj, Iran.

² accounting, humanities and social science, Kurdistan, Sanandaj, Iran

³ Kurdistan-sanandaj-university of kurdistan- accounting, Sanandaj, Iran

10.48301/kssa.2025.481719.3017

Abstract

Recently, a third tool called classification shifting for earnings management has been considered. According to the listed companies’ use of classification shifting method and also, the role of investor confidence, which is argued to have a significant impact on earnings management, this type of earnings management should not be overlooked. Also, the role of audit quality, the number of profit forecasts by managers and the type of Auditor's Opinion in reducing confidential information is vital. Therefore, the purpose of this research is to investigate the effect of audit quality, the number of profit forecasts by managers and the type of Auditor's Opinion on the relationship between the classification shifting and investors' confidence. The present sample of this study includes 117 companies listed on the Tehran Stock Exchange from the period of 2011 to 2021. In order to test the research hypotheses, multiple regression analyses have been used. The results show that there is a positive and significant relationship between the classification shifting and investment confidence, and audit quality, auditor's opinion and the number of managers' profit forecasts decrease the relationship between classification shifting and investors' confidence.

Keywords

classification shifting, investors'

confidence investment confidence, audit quality, number of profit forecasts, Auditor'

s Opinion

Subjects