The Effect of Auditor Tenure and CEO Role Duality on the Probability of Opportunistic Earnings Management

In many companies, the management of the company is entrusted to individuals other than its owners and shareholders. The separation of ownership from management in many companies can lead to various problems. For example, managers may lack the necessary skills to run their respective areas of responsibility, or they may reward themselves with unreasonable incentives and bonuses that are not aligned with their performance. Therefore, the concept of corporate governance was developed to address the issues arising from the separation of ownership and management of a company. Based on this, the present study examines the impact of the tenure of auditors and CEO duality on the likelihood of earnings management by management opportunism. To achieve this goal, information from 119 companies listed on the Tehran Stock Exchange for five years (from the beginning of 2016 to the end of 2020) was collected, and the necessary research variables were calculated and statistically tested. The research method used is descriptive-correlational, and the research design is experimental, utilizing a post-event approach. Multiple regression analysis was utilized to test the hypotheses of the research. The hypotheses were examined using statistical and econometric methods. The research findings indicate that both auditor tenure and CEO duality have a positive and significant impact on earnings management.