scholarly journals The Effect of Audit Quality on Accruals Earnings Management in Nigerian Listed Firms

2019 ◽  
Vol 8 (4) ◽  
pp. 4894-4897
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Audit Quality ◽  
Stock Exchange ◽  
Audit Fees ◽  
Annual Reports ◽  
Management Level ◽  
Listed Firms ◽  
The Public ◽  
Creative Accounting

Earnings manipulation studies are of utmost importance to both the shareholders and stakeholders because of its effect in investment and management decisions. The practices are directly affecting the quality of financial reporting and increase information asymmetry between the management and shareholders. Thus, Audit Quality is one of the tool academicians use in measuring the level of earning practices in the organizations. However, this study investigated the possible effect of audit quality towards the change of earnings management level among the Nigerian listed firms. The study used all the public listed firms in the main flow of the Nigerian Stock Exchange (NSE) as a population from the year 2012 until 2017. Sixty-three selected companies were selected as a sample based on the filtration criteria of the study. The financial data was obtained from the Thompson Reuters DataStream, and the corporate governance data was from the annual reports and accounts of the companies. Audit quality and accrual model was used to test the relationship between the study variable. The study applied multiple regression to test the model. It was revealed from the regression that audit quality is negatively significant with accrual earnings management. This finding is indicating that any increases in the unit of audit fees will decrease the earnings management of the selected firms. Thus, the finding is supporting agency theory and is contrary to the assumption of creative accounting theory. The result of this study will assist the relevant authorities in decision making and policy setting towards the best practices of the Nigerian listed firms.

The Impact of IFRS adoption and AQ upon Earnings Management in Saudi Stock Exchange (Tadawul): تأثير تطبيق المعايير الدولية لإعداد التقارير المالية وجودة المراجعة على إدارة الأرباح للشركات المدرجة في السوق المالية السعودية (تداول)

2020 ◽  
Vol 4 (15) ◽  
Author(s):  
Maha Nasser Allehaidan
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Audit Quality ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Listed Firms ◽  
Discretionary Accrual ◽  
Financial Reporting Standards ◽  
Ifrs Adoption ◽  
The Impact

The main purpose of this paper is to examine the impact of International Financial Reporting Standards (IFRS) adoption and Audit Quality (AQ) on Earnings Management (EM) practices in Saudi Arabia listed firms. EM is measured by the discretionary accrual using Healy (1985) and Kothari, Leone, and Wasley (2005) models. The research sample contains 16 Saudi listed firms during the period from 2014 to 2019. Statistical analysis including t-test and linear regression were used to test the research hypotheses. The investigation indicates that there is a negative relationship between IFRS adoption and EM practices, especially if it is combined with AQ, while it found a positive relationship between firms’ size and accrual EM, and no significant impact of AQ on firms’ debt ratio and EM practices. The importance of these results lies in providing clear evidence that the adoption of IFRS in developing countries has helped reduce earnings manipulation practices, which contributes to gaining confidence in Saudi firms and thus attracting many foreign investments.

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.

Determinants of audit fees in quoted financial and non-financial firms

2021 ◽  
Vol 3 (2) ◽  
pp. 30-40
Author(s):  
Wasiu Ajani Musa ◽  
Ramat Titilayo Salman ◽  
Ibrahim Olayiwola Amoo
Keyword(s):  
Financial Reporting ◽  
Audit Quality ◽  
Secondary Data ◽  
Sampling Technique ◽  
Audit Fees ◽  
Three Dimensions ◽  
Annual Reports ◽  
Lagrangian Multiplier ◽  
Financial Firms ◽  
Lm Test

Regulators have ensured the compulsory disclosure of audit fees in the financial statement to overcome abnormal fees and instill credibility in the financial report since audit pricing is contingent upon audit quality. However, discrepancies between audit fee dimensions are evidenced in the abnormal audit fees, resulting in accounting scandals. Hence, this study assessed the determinants of audit fees in quoted financial and non-financial firms by building a model underpinned by agency theory (Mitnick, 2006) and economic theory of product differentiation (Beath & Katsoulacos, 1991). Secondary data were utilized from companies’ annual reports between 2009 and 2018 using the purposive sampling technique. Furthermore, Breusch-Pagan Lagrangian multiplier (LM) test and the Hausman test indicated the consistency of the models. The static panel regression estimations showed that auditee size, risk, auditor size, reputation, engagement lag, and International Financial Reporting Standards (IFRS) implementation significantly affect audit fees in both sectors. This study concluded that the three dimensions largely determine audit fees. This study instructively proposed that assurance clients should devise an outline of guidelines and practices to guide activities in the sectors by monitoring the variables that impact audit fees

scholarly journals Sri Lankan intellectual capital disclosure: An empirical analysis

2019 ◽  
Vol 18 (1) ◽  
pp. 17
Author(s):  
Pratheepkanth Puwanenthiren ◽  
Alagathurai Aj anthan ◽  
Lingesiya Kengatharan
Keyword(s):  
Financial Reporting ◽  
Stock Exchange ◽  
Descriptive Analysis ◽  
Recovery Phase ◽  
Annual Reports ◽  
Sri Lankan ◽  
Listed Firms ◽  
Structural Capital ◽  
Reporting Framework ◽  
Post War

<p>This study examines voluntary IC disclosure provided by Sri Lankan firms in annual reports from the year 2016/17. A 100-firms sample, from the Colombo stock exchange (CSE)-listed firms. Findings suggest that Sri Lankan firms, on average, are aware of the significance of IC disclosure. Concerning the descriptive analysis, the results indicate that most of the information reported (41 percent) is related to human capital; 31 percent is related to relational capital and the 21 percent concerns structural capital disclosure.  The results also suggest that industry nature and firm size play a key role as a determinant for the disclosure of IC in Sri Lankan annual reports. As the no definite IC disclosure framework has been established within Sri Lankan firms. Concurrently as Sri Lanka passes through its post-war-recovery phase, reform of its mutually agreed financial reporting framework is essential to reduces information asymmetry and therefore reducing the agency costs.</p>

scholarly journals Mandatory IFRS Adoption and Real/Accruals Bases Earnings Management in the UK

2021 ◽  
Vol 10 (1) ◽  
pp. 25-39
Author(s):  
Mohammad I. Almaharmeh ◽  
Adel Almasarwah ◽  
Ali Shehadeh
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Robust Regression ◽  
Stock Exchange ◽  
Real Earnings Management ◽  
Listed Firms ◽  
Financial Reporting Standards ◽  
Ifrs Adoption ◽  
Mandatory Adoption ◽  
The Uk

Here, the link between the mandatory adoption of International Financial Reporting Standards (IFRS) and Real Earnings Management (REM), as well as Accrual Earnings Management (AEM), will be examined for non-financial listed firms in the London Stock Exchange. Robust regression analysis of the mandatory IFRS adoption will be conducted on the panel data, as well as earnings management using three AEM models and three REM models. Mixed results with respect to the qualities of AEM and REM were notably garnered, with mandatory IFRS adoption positively relating to the Roychowdhury of abnormal cash flow and the Roychowdhury of abnormal production. Meanwhile, the Roychowdhury of abnormal discretionary expenses, standard Jones, and Kothari negatively related to mandatory IFRS adoption, whilst modified Jones showed an insignificant relation to mandatory IFRS adoption. Changes in IFRS adoption and guidelines for UK firms may have an impact on AEM and REM, and, as predicted, mandatory IFRS adoption mostly affects the Kothari model followed by the standard Jones model as proxies for accounting earnings quality.

Reviewing Effect of Audit Quality and Ownership Structure on Earnings Management of Listed Firms in Tehran Stock Exchange

2015 ◽  
Vol 5 (10) ◽  
pp. 42
Author(s):  
Abolfazl Ghadiri Moghaddam ◽  
Mahdi Filsaraei ◽  
Ali Baradaran ◽  
Neda Boroumand ◽  
Nahid Rezaei Mokhtari ◽  
...  
Keyword(s):  
Earnings Management ◽  
Ownership Structure ◽  
Audit Quality ◽  
Stock Exchange ◽  
Listed Firms

scholarly journals Does audit quality influence earnings management in emerging markets? Evidence from Jordan

2020 ◽  
Vol 23 (1) ◽  
pp. 64-74 ◽  
Author(s):  
Taha Suleiman Almarayeh ◽  
Beatriz AIBAR-GUZMAN ◽  
Modar Abdullatif
Keyword(s):  
Earnings Management ◽  
Management Practices ◽  
Audit Quality ◽  
Institutional Environment ◽  
Stock Exchange ◽  
Audit Fees ◽  
Quality Attributes ◽  
Least Square ◽  
Institutional Setting ◽  
Cultural Economic

Este estudio investiga si algunos atributos de la calidad de auditoría son capaces de restringir la manipulación de resultados en un país en desarrollo, Jordania, cuyo contexto cultural, económico e institucional es muy diferente del contexto de los países analizados anteriormente. Se usó la regresión de mínimos cuadrados generalizada (GLS) para estudiar la asociación entre dos atributos de la calidad de auditoría (tamaño del auditor y honorarios de auditoría) y los ajustes por devengos discrecionales, como proxy de la manipulación de resultados, para una muestra de empresas industriales que cotizan en la Bolsa de valores de Amman durante el período 2012 - 2016. Los resultados son consistentes con la expectativa de que en los países emergentes la auditoría externa puede funcionar de manera diferente a la de los países anglosajones y de Europa occidental con respecto a su papel en la restricción de la manipulación de resultados e indican que, dado el entorno institucional en Jordania, el tamaño del auditor y los honorarios de auditoría no tienen un efecto significativo en la manipulación de resultados. Este estudio proporciona a los lectores información sobre si y cómo el entorno institucional influye en la relación entre la calidad de la auditoría y la manipulación de resultados. Además, presenta nueva evidencia sobre el efecto moderador del nivel de los honorarios de auditoría en su relación con la manipulación de resultados. Los resultados de este estudio podrían proporcionar información valiosa a los reguladores, tanto en Jordania como en otros países con un entorno económico e institucional similar, para prevenir las prácticas de manipulación de resultados. This study investigates whether some audit quality attributes are capable to restrict earnings management in a developing country, Jordan, whose cultural, economic and institutional context is very different from most previously analyzed countries’ context. Generalized least square regression (GLS) was used to study the association between two audit quality attributes (auditor size and audit fees) and discretionary accruals, as a proxy of earnings management, for a sample of industrial firms listed on the Amman Stock Exchange during the period 2012 – 2016. The findings are consistent with the expectation that in emerging countries external audit can function differently from that in Anglo-Saxon and West-European countries with regard to its role in restricting earnings management and indicate that, given the institutional environment in Jordan, auditor size and audit fees have no significant effect on earnings management. This study provides readers with information about if and how the institutional setting influences the relationship between audit quality and earnings management. Furthermore, it presents new evidence regarding the moderating effect of the level of audit fees on their relation with earnings management. This study’s findings could provide valuable information to regulators and standards setters, both in Jordan and other countries with a similar economic and institutional environment, which can help in preventing earnings management practices.

scholarly journals Keys to reduce earnings management in emerging markets

2014 ◽  
Vol 45 (3) ◽  
pp. 81-95 ◽  
Author(s):  
M. Palacios Manzano ◽  
I. Martínez Conesa ◽  
H. Garza Sánchez
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Audit Quality ◽  
Investor Protection ◽  
Reporting Standard ◽  
Generally Accepted Accounting Principles ◽  
Listed Firms ◽  
Accounting Regulation ◽  
Big 4 ◽  
High Standards

This paper examines earnings quality adapted to International Financial Reporting Standards in Mexican emerging capital market and how investor protection and audit quality to override managers’ incentives to engage in earnings management. We evidence that the new accounting regulation could be considered of high quality financial reporting standard because it is associated with lower earnings management. The analyses also suggest that cross-listed firms have higher quality local generally accepted accounting principles accounting information as measured by earnings management. There is also evidence that earnings of Mexican companies with Big 4 auditors are of higher quality. The results contribute to the ongoing debate on whether high standards are sufficient and effective in countries with weaker investor protection rights.

scholarly journals ANALISIS KUALITAS AUDIT DAN PERTUMBUHAN PENJUALAN TERHADAP KEWAJIBAN PAJAK DENGAN MANAJEMEN LABA SEBAGAI VARIABEL INTERVENING

2019 ◽  
Vol 2 (3) ◽  
pp. 168
Author(s):  
Dian Maya Sagita
Keyword(s):  
Earnings Management ◽  
Path Analysis ◽  
Audit Quality ◽  
Stock Exchange ◽  
Sales Growth ◽  
The Public ◽  
Units Of Analysis ◽  
Government Sector ◽  
The Government ◽  
Positive Effect

The company still considers the obligation to pay taxes a burden because there is a transfer of resources from the business sector to the public or government sector so that management often makes various efforts to minimize the tax burden, even though the compliance of taxpayers in paying taxes will assist the government in conducting programs development that can be enjoyed by the citizen. This study aimed to analyze the effect of audit quality and sales growth on tax obligations with earnings management as an intervening variable. The population in this study were all property and real estate companies listed on the Indonesia Stock Exchange in 2013-2017. The sample was selected using a purposive sampling method and obtained 100 units of analysis. The analytical method used is descriptive statistical analysis and path analysis (path analysis) using IBM SPSS 24 application. The results showed that audit quality and sales growth did not significantly influence earnings management either partially or simultaneously. Furthermore, the audit quality variable does not have a significant effect on tax obligations, but the sales growth variable shows a significant positive effect on the tax liability variable. The results of the path analysis test show that each variable of audit quality and sales growth has no effect on tax liabilities through earnings management as a mediating variable. The conclusion of this study is the amount of tax liability borne by the company is influenced by the level of sales growth.

scholarly journals Pengaruh Independensi dan Keahlian Komite Audit Terhadap Manajemen Laba Riil dengan Kualitas Audit Sebagai Variabel Moderasi

2021 ◽  
Vol 2 (4) ◽  
pp. 345-358
Author(s):  
Ditta Dwi Astuti ◽  
◽  
Lidya Primta Surbakti ◽  
Aniek Wijayanti ◽  
◽  
...  
Keyword(s):  
Earnings Management ◽  
Audit Committee ◽  
Audit Quality ◽  
Stock Exchange ◽  
Secondary Data ◽  
Production Costs ◽  
Real Earnings Management ◽  
Annual Reports ◽  
Panel Data Regression ◽  
Negative Effect

Abstract Purpose: This study aimed to analyze the influence of the audit committee's independence and expertise on real earnings management by using audit quality as the moderating variable and firm size, leverage, and profitability as control variables. Research Methodology: Real earnings management was processed by Roychowdhury’s model and it used the abnormal value of operating cash flow, discretionary expenses, and production costs. This study used secondary data from annual reports of non-financial companies listed on the Indonesia Stock Exchange for the period 2017-2019 and the total was 516 companies. This study used panel data regression and was processed by Stata. Results: This study proves that audit committee independence and leverage have a significant negative effect on real earnings management through discretionary expenses and audit quality cannot moderate the relationship between audit committee independence and audit committee expertise on real earnings management. Limitation: The study used audit quality as moderating variable. However, the results cannot prove that audit quality is able to affect real earnings management. Contribution: The results obtained can be used for investors' and creditors' consideration when making investment or loans decisions and can be references for further research.

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