scholarly journals Internal Auditing Quality and Earnings Management: Evidence from Sultanate of Oman

2021 ◽  
Vol 4 (2) ◽  
pp. 115-124
Author(s):  
Hind Juma Alyaarubi ◽  
Dua Said Alkindi ◽  
Essia Ries Ahmed
Keyword(s):  
Earnings Management ◽  
Audit Quality ◽  
Internal Audit ◽  
Secondary Data ◽  
Securities Market ◽  
Internal Auditing ◽  
Sultanate Of Oman ◽  
Listed Firms ◽  
Two Sectors ◽  
Research Show

The main purpose of this research is to determine the link between internal auditing quality and earnings management in Omani companies.  In this research, a sample size of 80 was designated from two sectors (Industrial, and Service) in Muscat Securities Market (MSM) in Sultanate of Oman. The secondary data collected is examined with Smart PLS 3.0. The findings of the research show a positive link between Internal audit quality and earnings management in both sectors (industrial and service). This finding indicates that the increase in audit quality will affect to enhance and improve the earning management in Omani listed firms.

Pengaruh Hubungan Politik Terhadap Manajemen Laba Pada Perusahaan Sektor Jasa Dengan Variabel Kontrol Ukuran Perusahaan Dan Kualitas Audit

2018 ◽  
Vol 16 (2) ◽  
pp. 30
Author(s):  
Dwikky Darmawan ◽  
Weny Putri
Keyword(s):  
Earnings Management ◽  
Firm Size ◽  
Significant Influence ◽  
Service Sector ◽  
Audit Quality ◽  
Stock Exchange ◽  
Secondary Data ◽  
Annual Reports ◽  
Political Connection ◽  
Discretionary Accrual

The purpose of this study is to determine the effects of political connection toward the earnings management of service sector companies with control variables firm size and audit quality. Firm�s political connection measured by using dummy variable. Earnings management is proxied by discretionary accrual which is measured by using Modified Jones Model. The research data applied in this study are the secondary data which are taken from the annual reports of service sector companies that listed in Indonesian Stock Exchange of 2016-2017 periods. There are 330 observations fit as sample, which are taken by using purposive sampling method. Data are processed by applying the multiple linear regression test. The result show that the political connection had positive but not significant influence to earnings management. Firm size had negative but not significant influence to earnings management. Whereas the audit quality had a negative and significant influence to earnings management.

scholarly journals The impact of internal audit in the activation of risk management under the governance of banks

2019 ◽  
Vol 5 (4) ◽  
pp. 7
Author(s):  
Afsar Ali Alimoradi ◽  
Chya Kareem Ahmad
Keyword(s):  
Risk Management ◽  
Internal Audit ◽  
Secondary Data ◽  
Internal Auditing ◽  
Audit Risk ◽  
Internal Auditor ◽  
Risk Management Process ◽  
Statistical Program ◽  
Bank Governance ◽  
The Impact

The research aims to measure and evaluate the impact of internal audit on the efficiency of risk management under the principles of the bank governance in a sample of banks. Thus, internal audit is an important function of controlling financial and administrative performance. It has the impact of evaluating and measuring the efficiency of the use of available resources and strengthening the so-called governance as well as contributing to the assessment and management of risks, which enhances the opportunities of economic units and banks in the optimal use of resources.Internal Audit assists senior management and the board in the process of  theidentifying, assessing and responding to risks, by providing various assurance and advisory services during the implementation of the risk management process. In order to achieve the objectives of the study and test its hypotheses, the study was based on primary and secondary data and the questionnaire was designed and the researchers used the Statistical Program (SPSS) to analyze the data. It was concluded during the research that there is a clear impact of the internal audit profession on the risk management by improving its effectiveness and efficiency under the principles of bank governance shows through the internal audit has a prominent position in banks and because it is linked to the highest levels of management as an independent control and advisory tool. The researchers present a set  of recommendations, the most important of which is the need to provide adequate financial and human resources for internal auditing in banks. The study also recommended to strengthen the components of the independence of the internal auditor in order to be able to perform his duties to the fullest. Key words :  Internal Audit , Risk Management , Banking Governance, Internal Auditor.

scholarly journals Impact of Applying Governance Standards in Evaluating the Quality of Internal Audit in Yemeni Private Universities

2021 ◽  
Vol 13 (46) ◽  
pp. 81-103
Author(s):  
Ahmed Ali Qassem Mohssen
Keyword(s):  
Audit Quality ◽  
Private Universities ◽  
Relative Weight ◽  
Internal Audit ◽  
Slight Variation ◽  
Internal Auditing ◽  
Audit Process ◽  
Transparency And Disclosure ◽  
The Impact

The study aimed to measure the impact of applying governance standards in evaluating the quality of internal audit in Yemeni private universities. To achieve this, the researcher followed the descriptive and analytical approach and employed a questionnaire to collect data from a sample that included (68) participants. After conducting relative analysis, governance was at an average level of (64.9%). There was also a slight variation in the level of implementation, as the dimension of transparency and disclosure was the most frequent dimension, followed by accountability and independence. Further, there was a medium level of adherence to internal auditing standards at a relative weight (65%). The level of commitment to the audit dimensions was as follows: managing the internal audit activities (67%), communicating the results (66%), assessing the risk and control management (64%), and planning and implementing the audit process (62%). and The study also found that the combined governance standards (transparency and disclosure, accountability, independence) increase the quality of the internal audit in Yemeni private universities and the highest dimensions of governance standards affecting the quality of internal auditing are the dimension of independence (80.3%), accountability (71.7%), and disclosure and transparency (63.7%). In light of this, the study recommended adopting governance standards as an integrated approach to achieve quality performance in private Yemeni universities; spreading the culture of governance in private universities among their leaders and staff by holding training courses, seminars, and conferences in order to be accepted and absorbed. In addition, governance should be included in some related academic courses in the disciplines of administrative and accounting sciences. Keywords: governance standards, internal audit quality assessment, private Yemeni universities.

scholarly journals The Effect of Audit Committee Characteristics on Audit Quality: The Moderating Role of Internal Audit Function

2020 ◽  
Vol 3 (2) ◽  
Author(s):  
Josephine Kuan Pei See ◽  
Anwar Allah Pitchay ◽  
Yuvaraj Ganesan ◽  
Hasnah Haron ◽  
Ratih Hendayani
Keyword(s):  
Structural Equation ◽  
Audit Committee ◽  
Audit Quality ◽  
Internal Audit ◽  
Secondary Data ◽  
Listed Companies ◽  
Internal Audit Function ◽  
The Relationship ◽  
Moderating Role

The purposes of study are to examine the effect of audit committee characteristics namely gender, frequency of meetings, independence member in audit committee and audit committee size on audit quality and the moderating role of internal audit function in the relationship between audit committee characteristics and audit quality. The objective is to contribute to the new evidence on the role of audit committee characteristics plays towards the audit quality with internal audit function as moderator. This research applied a quantitative approach and secondary data as the main source of information for analysis. Stratified random sampling techniques are being used in this study. Further, the structural equation modelling (SEM) approach via SmartPLS was utilized to achieve the research purpose by evaluating the data collected from 250 public listed companies in Malaysia. The results reveal that only three of the audit committee characteristics, namely presence of female members in the audit committee, frequency of meetings and independence of directors, are positively influencing the audit quality for listed companies in Malaysia. Surprisingly, this study also found that internal audit function did not play the moderating effect in the relationship between audit committee characteristics and audit quality. The findings will facilitate researchers and scholars to enhance the understanding of audit committee characteristics particularly the gender, frequency of AC meetings and independence members in the audit committee played in improving overall audit quality. The companies’ stakeholders like professional accountancy body and governments may use the outcomes from this research study to improve existing rules and government regulations and code of conducts of its members to improve the quality of their works. This study contributes to the relatively new discussion on the effect of audit committee characteristics on audit quality by adding internal audit function as a moderator in Malaysia. The outcome from this study may assist the companies’ stakeholders like professional accountancy body and governments in determining improved methods to enhance audit committee characteristics in improving audit quality.

Internal audit quality and earnings management: evidence from the UK

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hazem Ramadan Ismael ◽  
Hany Kamel
Keyword(s):  
Earnings Management ◽  
Management Practices ◽  
Audit Quality ◽  
Negative Relationship ◽  
Internal Audit ◽  
Ordinary Least Squares ◽  
Least Squares Regression ◽  
Content Type ◽  
Abnormal Accruals ◽  
The Uk

Purpose This study aims to examine the association between internal audit quality and the involvement of UK companies in earnings management practices. Design/methodology/approach To measure the internal audit quality, this study uses 115 responses for a postal questionnaire that was addressed to the heads of internal audit departments in a sample of non-financial listed companies in the UK context. The other financial and governance data for the respondent companies were collected from the Datastream and the companies’ annual reports. The present study uses the signed abnormal accruals as a proxy for earnings management and uses both logistic and ordinary least squares regression models to test the research hypothesis. Findings This study finds a negative relationship between the internal audit quality and the abnormal accruals, implying the prominent role of internal audit in reducing the upwards earnings management. The study also finds a significant impact of the internal audit competence on reducing the engagement of UK companies in income-increasing earnings management compared to the internal audit independence. This remarkable result suggests the companies need to focus more on enhancing the internal audit competence to reduce the opportunistic management’s behaviour. Practical implications This study has important implications for the internal audit’s practice, regulation and research. Originality/value This is the first study that investigates the relationship between internal audit quality and earnings management in the UK context. Furthermore, it uses a comprehensive measure for the internal audit function (IAF) quality covering different aspects of IAF quality based on the global Institute of Internal Auditor standards and prior internal audit literature.

scholarly journals The impact of audit quality on real earnings management in the UK context

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Syed Numan Chowdhury ◽  
Yasser Eliwa
Keyword(s):  
Earnings Management ◽  
Audit Quality ◽  
Production Costs ◽  
Real Earnings Management ◽  
Sampled Data ◽  
Content Type ◽  
Listed Firms ◽  
Big 4 ◽  
The Uk ◽  
The Impact

Purpose The purpose of this paper is to examine whether audit quality influence real earnings management activities using a sample of UK listed firms that have strong incentives to manage earnings upward through meeting past year’s earnings as a benchmark in the post-adoption period of International Financial Reporting Standards (IFRS). Design/methodology/approach The authors use a sample of 4,774 firm-year observations of UK listed firms during the period 2005–2018. Univariate and multivariate analyses have been conducted to test the association after controlling for firm characteristics and institutional variables. Findings The study reports that the presence of Big 4 auditors is significantly and positively related with greater levels of sales and discretionary expenses manipulation. Though the authors do not find any conclusive evidence on production costs manipulation, the aggregated measure of real earnings management shows a significant positive association with the presence of Big 4 auditors. Practical implications The study implies that managers who have incentives to manage earnings upward around the UK firms take advantage of the accounting flexibility in defining policies while reducing information asymmetry among the investors to signal better future performance. The approach to detect earnings manipulation as described in the auditing standards fails to limit the managerial use of real activities due to limited scope and unclear guidance. Thus, due to the significant impact on public policies, the results should, therefore, be of interest to the regulators and standard setters. Originality/value To the best of the authors’ knowledge, this is the first study that examines the association between audit quality and real earnings management for the UK all-purpose operational firms in sampled data that just meet past year’s earnings as a benchmark in the post-IFRS period.

scholarly journals Pengaruh Leverage, Ukuran Perusahaan, Profitabilitas, Kualitas Audit, dan Komite Audit terhadap Manajemen Laba

2021 ◽  
Vol 23 (1) ◽  
pp. 43-52
Author(s):  
Nimas Arum Sari ◽  
Yeye Susilowati
Keyword(s):  
Earnings Management ◽  
Audit Committee ◽  
Audit Quality ◽  
Stock Exchange ◽  
Secondary Data ◽  
Total Sample ◽  
Company Size ◽  
Analysis Tool ◽  
Manufacturing Companies ◽  
Data Analysis Tool

This test is conducted in order to analyze and test the leverage, company size, profitability, and audit quality, and the audit committee in influencing earnings management. This research is sourced from an annual report from a manufacturing company on the Indonesia Stock Exchange. Starting from 2015 to 2018. Samples taken by researchers there are certain criteria in order to obtain more representative data. So that a total sample of 327 manufacturing companies was obtained during the study period. Researchers used secondary data, the data obtained through the site www.idx.co.id, www.sahamok.com, and several related company websites. This data analysis tool uses multiple linear regression. The end of this test includes evidence in the form of leverage and audit committee which has a positive and significant effect on earnings management, while company size, profitability and audit quality have no effect on earnings management.

scholarly journals Pengaruh Independensi Auditor, Kualitas Audit, Manajemen Laba, Dan Komisaris Independen Terhadap Integritas Laporan Keuangan (Studi Kasus Pada Perusahaan Perbankan Yang Terdaftar Di BEI Periode 2014-2017)

2019 ◽  
Vol 16 (1) ◽  
Author(s):  
Sri Ayem ◽  
Dewi Yuliana
Keyword(s):  
Earnings Management ◽  
Sampling Method ◽  
Audit Quality ◽  
Stock Exchange ◽  
Secondary Data ◽  
Financial Statements ◽  
Auditor Independence ◽  
Financial Report ◽  
Independent Variables ◽  
Descriptive Research

The purpose of this study was to determine the effect of auditor independence, audit quality, earnings management, and independent commissioners on the integrity of financial statements. This research is included in descriptive research. The population in this study are banking companies listed on the Indonesia Stock Exchange (IDX) during 2014-2017. The sample in this study was determined using a purposive sampling method and obtained 25 companies, samples in the 4 years of the annual financial report. The type of data used is secondary data. To find out the influence between independent variables and the dependent variable using the method of multiple regression analysis. The results of this study indicate that auditor independence has no significant effect, audit quality has no significant effect, earnings management has a significant effect, independent commissioners have a significant effect on the integrity of financial statements.

scholarly journals PENGARUH KUALITAS AUDIT DAN AUDITOR SWITCHING TERHADAP MANAJEMEN LABA

2020 ◽  
Vol 22 (1) ◽  
pp. 95-104
Author(s):  
FELITA ICASIA HADI ◽  
SHERLY TIFANI
Keyword(s):  
Earnings Management ◽  
Multiple Regression ◽  
Audit Quality ◽  
Annual Report ◽  
Stock Exchange ◽  
Secondary Data ◽  
Listed Companies ◽  
Negative Direction ◽  
Auditor Switching ◽  
The Relationship

The purpose of this study is to examine the effect of audit quality and auditor switching on earnings management with fee audit as the intervening variable. Data in this study is secondary data derived from the annual report of listed companies in Indonesia Stock Exchange in 2016-2018. There are 117 sample and the method used for sampling is purposive sampling. The hypothesis ini this study was tested using multiple regression. The result of this study showed that audit quality positively influence fee audit but not significant, auditor switching negatively influence  fee audit, audit quality influence earnings management with negative direction, auditor switching positively influence earnings management but not signifitcant, fee audit negatively influence earnings management but not significant, and there is no influence of variable intervening in the relationship between audit quality and auditor switching on earnings management.

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