Effect of Adjusting Accounting Errors Identified by Independent Auditors on Dividend Policy of Companies Listed in Tehran Stock Exchanges

Dividend policy is one of the most controversial issues in the field of financial management. With respect to the importance of policy of corporate profit sharing, study on reliable profit that should be distributed between equity owners, and avoiding distributing delusive profit seems a very important issue. This paper, following Lawson and Wang (2014) and Caskey and Hanlon (2013), studies the relationship between dividend policy and both the auditor’s and managers’ expected profit. To examine the dividend policy, a survey method was used for obtaining real information of 99 companies listed in the Tehran Stock Exchange in the period 2002 to 2011, and then, a descriptive statistics method in the form of panel data regression model was employed. The results showed that the explanatory power of auditors’ expected profit in dividend policy is more than the explanatory power of managers’ expected profit. The results also showed that there is no meaningful difference between auditors’ expected profit and managers’ expected profit.

Abstract licence: CC BY-NC

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