The Impact of Using a Joint Auditor Considering Management Expectations in the Supply Chain on Cost Stickiness
Keywords:
Uncertainty, Joint Auditor, Pessimism, Optimism, Cost Stickiness-Abstract
This study aims to examine whether the use of joint auditors, under optimistic or pessimistic managerial expectations, affects the degree of cost stickiness among firms. This fundamental, correlational study used financial data from all companies listed on the Tehran Stock Exchange between 2012 and 2023. Data were collected using library research, firms’ financial statements, and databases such as Tadbir-Pardaz and Rahavard Novin. No sampling was conducted; instead, the full accessible population was analyzed. Panel-data regression models were estimated using generalized least squares to test the hypotheses after conducting diagnostic tests (Limer and Hausman) to determine the proper estimation technique. The results indicated that joint auditing does not have a statistically significant effect on cost stickiness—neither when managerial expectations are optimistic nor when they are pessimistic. Interaction terms between joint auditor presence and managerial expectations were statistically insignificant in both tested models. Thus, both hypotheses were rejected, demonstrating that joint auditors do not influence asymmetric cost behavior in Iranian firms. The findings suggest that joint auditing, despite its potential informational benefits, does not mitigate cost stickiness within the institutional and regulatory context of Iran. Weak auditor independence, inadequate oversight structures, and the limited role of audit reports in managerial decision-making may explain the lack of impact.
Downloads
References
Abdel Megeid, N. S., & El-Deeb, M. S. (2021). Board Characteristics Effect on Cost Stickiness Using Earnings Management as a Mediating Variable "Evidence from Egypt".
Abdullah, A. A. H. (2021). Cost stickiness and firm profitability: A study in Saudi Arabian industries. Investment Management & Financial Innovations, 18(3), 327. https://doi.org/10.21511/imfi.18(3).2021.27
Aurenz, P., & Magnusson, A. (2021). The Impact of Corporate Social Responsibility on Cost Stickiness.
Badiei, R., Nemat, & Beitari. (2023). Cost stickiness; Emphasis on the effect of earnings management constraints and intellectual capital efficiency. Accounting and Management Auditing Knowledge, 12(46), 411-428.
Banker, R. D., Byzalov, D., & Plehn-Dujowich, J. M. (2014). Demand uncertainty and cost behavior. The Accounting Review, 89(3), 839-865. https://doi.org/10.2308/accr-50661
Costa, M. D., & Habib, A. (2023). Cost stickiness and firm value. Journal of Management Control, 34(2), 235-273. https://doi.org/10.1007/s00187-023-00356-z
Dhaliwal, D., Shenoy, J., & Williams, R. (2025). Common auditors and relationship-specific investment in supplier-customer relationships. The British Accounting Review, 101732. https://doi.org/10.1016/j.bar.2025.101732
Dhaliwal, D. S., Lamoreaux, P. T., Litov, L. P., & Neyland, J. B. (2016). Shared auditors in mergers and acquisitions. Journal of Accounting and Economics, 61(1), 49-76. https://doi.org/10.1016/j.jacceco.2015.01.005
Hashemi Pour, N., Mansouri, F., Gholami, J., & Safa. (2023). The impact of factors arising from the country's political-economic structure on the stickiness of company expenses. Financial Accounting and Auditing Research, 15(57), 239-258.
Irawan, D. (2021). Intellectual Capital And Cost Stickiness: A Modified Value Added Intellectual Coefficient (Mvaic) Approach. Jurnal Reviu Akuntansi Dan Keuangan, 11(2), 285-293. https://doi.org/10.22219/jrak.v11i2.17432
Kim, Y. M., & Kim, J. B. (2022). Employee Adjustment Costs and Asymmetric Cost Behavior. Global Business Administration Review, 19(6), 272-292. https://doi.org/10.38115/asgba.2022.19.6.272
Li, T., & Zhang, Z. (2022). Financial Data Analysis-The Impact of External Auditor Types on Cost Stickiness: Evidence from China. 2022 2nd International Conference on Business Administration and Data Science (BADS 2022), https://doi.org/10.2991/978-94-6463-102-9_99
Nansi Muhammad, M. (2023). An investigation of the moderating role of Egyptian firm's characteristics on the relationship between costs stickiness and firm profitability. Scientific Journal for Financial and Commercial Studies and Research, 4(1), 105-133. https://doi.org/10.21608/cfdj.2023.258039
Parsaei, M., & Sohrabi. (2022). Trade Payables and Cost Stickiness with Emphasis on Agency Problem and Customer Concentration. Experimental Accounting Research, 12(2), 65-90.
Qasem Bolu, E., Moazzaz, & Davood Khan, H. (2023). Examining the relationship between management perspective and cost stickiness in Tehran Stock Exchange. Planning and Budgeting, 17, 79-95.
Rezazadeh Behzad, K. S., & Salehi Allah, K. (2021). Examining the Impact of Macroeconomic Uncertainty on Cost Stickiness Behaviour.
Wan, L., Ou, J., & Lin, B. (2021). Does religion affect cost stickiness? Evidence from China. Applied Economics, 53(32), 3730-3743. https://doi.org/10.1080/00036846.2021.1885612
Zhai, D., Zhao, X., Bai, Y., & Wu, D. (2023). A study of the impact of executive power and employee stock ownership plans on corporate cost stickiness: evidence from China a-share non-financial listed companies. Systems, 11(5), 238. https://doi.org/10.3390/systems11050238
Zhang, B., Yang, L., & Zhou, R. (2023). Internal governance and cost stickiness. Journal of Management Accounting Research, 35(1), 173-194. https://doi.org/10.2308/JMAR-2020-043
Downloads
Published
Submitted
Revised
Accepted
Issue
Section
License
Copyright (c) 2025 Vahid Raboobi (Author); Hamidreza Bazazzadeh Torbati (Corresponding author); Mohammad Karami (Author)
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
