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This paper aims to analyze the relationship between the following auditor's characteristics with detecting frauds in the listed companies on the Tehran Stock Exchange.

A multiple regression model is used to test the research hypothesis. The hypothesis was further tested with a sample of 187 companies listed on the Tehran Stock Exchange (1,309 observations) from 2012 to 2018 and by using multiple regression models based on panel data and the random-effects model.

The results suggest a positive and significant relationship between audit firms' size, auditor rotation, specialization in the industry, the audit market's focus, auditor's independence, audit report lag and renewal of financial statements with fraud detection. The results revealed a significant relationship between the period of auditor tenure, auditor's narcissism, audit fees and the type of auditors' opinion (un-qualified opinion) with fraud detection.

As the present study is a pioneer in examining this issue in the emerging markets, it provides users, analysts and legal entities with useful information about auditor characteristics that significantly affect the fraud detection of financial statements. The results mitigate the literature gap and improve knowledge in this area.

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.”

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.

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).

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.