The Relationship between Financial Distress and Earnings Management Regarding the Role of Auditor Size during Recession

The financial helplessness of companies is one of the factors that, when faced with it, the management of the company takes certain actions and accordingly manipulates the accounting profit as one of the most obvious performance evaluation items when faced with financial helplessness. do The companies that are facing financial helplessness to get rid of the bankruptcy costs start profit management and use more accrual items than other companies. In this research, the relationship between financial helplessness and profit management was investigated according to the role of the auditor during the period of 2015-2019. In terms of classification according to the purpose, this research is an applied research, and in terms of classification based on the method, it is considered a descriptive research, and among the descriptive researches, it is of the correlational type. The statistical sample of the research was selected by the systematic elimination method of 120 companies. In this research, three indicators of negative net profit, negative working capital, and simultaneous negativity of profit and working capital were used to investigate financial helplessness. The results of the hypothesis test at the five percent error level showed that there is a significant relationship between financial helplessness and profit management. Also, the size of the auditor has a significant effect on the relationship between the company's financial helplessness and profit management.