Effect of executive board and family control on audit opinion

In this study the relation and effect of corporate governance on audit opinion of CPAs is investigated. The companies investigated are listed in Tehran Stock Exchange and are selected using the systematic elimination method. They are 104 companies. The time period is 2008-2010. The statistical methods used are logistic regression and Wald test. The data were collected from the companies’ annual financial statements and independent auditors’ opinion. The results indicated a significant relation between the ratio of the executive board and type of independent auditors’ opinion. Therefore, in companies with higher ratio of executive board members, the right opinion of an independent auditor is taken along with an explanatory paragraph. Moreover, there was a positive and significant relation between family control and type of CPA’s opinion; that is, if a company has higher rank in terms of ownership, then the independent auditor’s opinion will have a fewer number of paragraphs and vice versa; in companies with more stockholders dispersion, the independent auditor’s opinion is unqualified and has more audit paragraphs. Adding the corporation’s size to the research model, the research results were approved.   Key words: Audit opinion, executive board, family control.