Abstract

High audit quality leads to a reduction in information asymmetry and an increase in agency costs, so, the present study aimed to investigate the effects of agency costs and information asymmetry on the audit quality. In the present study, two measures of auditor size and type of auditing report were used. In the present study, the samples were 111 companies accepted in Tehran Stock Exchange during the period of 2010-2011. SPSS software was used for data analysis. The results of the present study showed that when auditor size is used to calculate the audit quality, there is negative and significant relationship between agency costs and audit quality. Additionally, the results showed that when type of auditing report is used to calculate the audit quality, no relationship was observed between agency costs and audit quality. Also, contrary to prediction, there is significant positive relationship between audit quality and information asymmetry.