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The relationship between political connections, auditor characteristics and auditor narcissism

Jalil Khaksar (Economics and Administrative Sciences, Qaenat Branch, Islamic Azad University, Qaenat, Iran)
Mahdi Salehi (Department of Accounting, Faculty of Economics and Administrative Sciences, Ferdowsi University of Mashhad, Mashhad, Iran)
Mahmoud Lari DashtBayaz (Faculty of Economics and Business Administration, Ferdowsi University of Mashhad, Iran)

Journal of Facilities Management

ISSN: 1472-5967

Article publication date: 11 August 2021

Issue publication date: 28 July 2022

389

Abstract

Purpose

This study aims to assess the relationship between political connections, auditor characteristics (audit quality and industry specialization) and auditors’ intrinsic characteristics (narcissism) in listed firms on the Tehran Stock Exchange. In other words, this paper attempts to answer the question “whether political connections, audit quality and industry specialization contribute to the growth of narcissism and overconfidence of auditors of listed firms on the Tehran Stock Exchange or not.”

Design/methodology/approach

A multivariate regression model is used for hypothesis testing. The study’s hypotheses were also examined using a sample of 768-year firm listed on the Tehran Stock Exchange during 2013–2018 and by using the multiple regression pattern.

Findings

The obtained results indicate a negative and significant association between political relations, narcissism and overconfidence. The auditor’s overconfidence will go down by increasing political relations. Moreover, the results show a positive and significant relationship between audit quality, industry specialization and narcissism. On the other hand, to the best of authors’ knowledge, this study measured, for the first time, the severity of political connections by using the exploratory factor analysis of eight variables (long-term liabilities, firm size, financial leverage, export, human resources, major governmental shareholders, board members affiliated to the government and institutional ownership).

Originality/value

The authors figured out that few studies carried out, so far, in the emergent markets on political connections and their impacts on narcissism and overconfidence of auditors, so this paper aims to assess the effect of such a phenomenon in the emergent markets and contributes to the development of knowledge and science in this field.

Keywords

Citation

Khaksar, J., Salehi, M. and Lari DashtBayaz, M. (2022), "The relationship between political connections, auditor characteristics and auditor narcissism", Journal of Facilities Management, Vol. 20 No. 4, pp. 521-537. https://doi.org/10.1108/JFM-03-2021-0038

Publisher

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Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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