Auditor's knowledge and firms' investment decisions in MENA countries: evidence from Tunisian context
by Asma Masrouki; Walid Houcine
International Journal of Managerial and Financial Accounting (IJMFA), Vol. 11, No. 1, 2019

Abstract: We investigate whether auditor' knowledge is associated with firm-level investment efficiency for Tunisian listed firms, after controlling for firms' overall level of financial reporting quality. We find that auditor' knowledge is positively associated with investment efficiency. The association between auditor's knowledge and investment efficiency seems to be independent of firms' financial reporting quality. Overall, our findings indicate that audit enhances the process of information production and through its insurance and/or assurance roles, provide investors with confidence which, in turn, causes managers to better allocate firm resources, and ultimately resulting in increased investment efficiency.

Online publication date: Wed, 13-Feb-2019

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