The Effect of Auditing Quality on Share Return: Application of Dynamıc Panel Data Analysis on Bist All Shares

Abstract

Purpose – To examine the relationship between the independent audit quality and the stock return of the companies included in the BIST Index between the years 2013-2022. Design/Methodology/Approach – Our study sample consists of 135 companies. The effect on the dependent variable wastried to be determined by using 4 independent and 4 control variables in the model created in order to use the Dynamic Panel Data Analysis (GeneralizedMethod of Moments - GMM) method as of our study sample and working years. The data needed to use the mentioned variables; Retrieved from BIST Data Store, Yahoo Finance and Public Disclosure Platform (KAP). Findings – Our study outcomed a significant relationship between the independent auditfirm, the presence of an explanationparagraph in the independent audit report, the time between two independent audit reports and the return on the stock, while a statistically significant relationship could not be found between the type of independent auditor's opinion and the return on the stock. Discussion – When the empirical results of the study a reevaluated; Among the factors affecting the investment decisions of potential and/or existinginvestors in terms of independent audit quality; It has been determined that there is a time elapsed between the fact that the independent auditactivity of the company is carried out by the Big Four (4BIGS), there is an explanation paragraph in the independent audit report prepared as a result of the independent audit activity and the independent audit reports are made available to the accounting information users.