Univrsity Of Tehran Press Accounting and Auditing Review 2645-8020 23 3 2016 11 21 The Effect of Audit Quality on Agency Costs and Information Asymmetry: Structural Equation Modeling Approach The Effect of Audit Quality on Agency Costs and Information Asymmetry: Structural Equation Modeling Approach 3533 372 59780 10.22059/acctgrev.2016.59780 FA Mehdi Heidari Member of Faculty in Accounting Group in Economic and Management Faculty in Urmia University Bahman Qaderi Master of Accounting in Urmia university Peyman Rasouli Journal Article 2016 01 10 In this study, the effect of audit quality on agency costs and information asymmetry has been examined. Among the accepted companies 99 ones in Tehran Stock Exchange were selected for statistical samples from 1385 to 1392 in order to attain the research purposes. To measure the audit quality, it has been used the observable variables such as the percentage of institutional investors, the type of audit opinion, audit size and the audit tenure. Also, it is used these variables like assets utilization ratio, the rate of assets revenue, Tobin's Q ratio and leverage ratio to measure agency costs. It was utilized the stock price volatility, earning forecast error, film size, growth opportunities and the percentage of non-institutional investors to quantify the amount of variable related to information asymmetry from observable variables. After having trusted the acceptable process of the research measurement and structural models, the results indicate that the increase of audit services quality leads to decreasing challenges over the separation of ownership and management including agency costs and information asymmetry. The results of the study also show that the increase of agency costs results in the increase of information asymmetry level. In this study, the effect of audit quality on agency costs and information asymmetry has been examined. Among the accepted companies 99 ones in Tehran Stock Exchange were selected for statistical samples from 1385 to 1392 in order to attain the research purposes. To measure the audit quality, it has been used the observable variables such as the percentage of institutional investors, the type of audit opinion, audit size and the audit tenure. Also, it is used these variables like assets utilization ratio, the rate of assets revenue, Tobin's Q ratio and leverage ratio to measure agency costs. It was utilized the stock price volatility, earning forecast error, film size, growth opportunities and the percentage of non-institutional investors to quantify the amount of variable related to information asymmetry from observable variables. After having trusted the acceptable process of the research measurement and structural models, the results indicate that the increase of audit services quality leads to decreasing challenges over the separation of ownership and management including agency costs and information asymmetry. The results of the study also show that the increase of agency costs results in the increase of information asymmetry level. https://acctgrev.ut.ac.ir/article_59780_cbbe500cf81785516c4b1dd9493da039.pdf