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JEL classification: M42Keywords: External audit quality Ownership structure Discretionary accruals Cross effect a b s t r a c t This article emphasizes the significance of researching the cross effect of using jointly external audit quality and ownership structure over managerial discretion in a largely unexplored, non-Western and emerging context. The analysis is based on a sample of 61 Tunisian firms listed and unlisted on the Tunis Stock Exchange and operating in the industrial and commercial sectors during the period 2007-2011. To provide evidence on this topic, we conduct an empirical examination. First, we examine the effect of external audit quality and ownership structure on the discretionary accruals for the whole sample. We find that only auditor reputation has a negative and significant effect on earnings management. Second, this article provides empirical evidence on the cross effect of external audit quality variables and capital concentration on earnings management. This test suggests that this combination has a negative and significant effect on earnings management in industrial firms but it has a positive and non significant effect in commercial firms. Finally, the third empirical test concerns the combined effect of external audit quality and institutional property on earnings management. We find that the cross effect of this combined relation is negatively and significantly associated with earnings management of industrial firms but it has no significant effect on the earnings management of commercial firms. As for the cross effect of the auditor seniority and the institutional property, it has a positive and a significant effect in the commercial sectors, while, it is positively and non-significantly associated with earnings management of industrial firms. Calidad de la auditoría externa y la estructura propietaria: interacción e impacto sobre la gestión de los ingresos en los sectores industriales y comerciales tunecinosCódigos JEL: M42Palabras clave: Calidad de la auditoría externa Estructura propietaria Gestión de ingresos Acumulado discrecional Efecto cruzado Sectores tunecinos r e s u m e n Este artículo enfatiza la importancia de investigar el efecto cruzado del uso conjunto de la calidad de la auditoría externa y la estructura propietaria sobre el criterio gerencial, en un contexto emergente no occidental y ampliamente inexplorado. El análisis se basa en una muestra de 61 empresas tunecinas y no cotizadas en la bolsa de Túnez, que operan en sectores industriales y comerciales durante el período 2007-2011. Para aportar evidencia sobre esta cuestión, realizamos un examen empírico. Primeramente, examinamos el efecto de la calidad de la auditoría externa y la estructura propietaria sobre el acumulado discrecional de la muestra en su totalidad. Encontramos que únicamente la reputación del auditor tiene un efecto negativo e importante sobre la gestión de los ingresos. En segundo lugar, este artículo aporta evidencia empírica sobre el efecto cruzado de las variables de calidad de la auditoría e...

Purpose The purpose of this paper is to focus on the moderating effect of mandatory International Financial Reporting Standards (IFRS) adoption on the relationship between chief executive officer (CEO) experience/education and earnings management in European companies. Design/methodology/approach Data from a sample of 302 European firms listed on Stoxx Europe 600 index and 596 CEOs from 2000 to 2014 are used to test the moderation model using moderation regression analysis. Findings Evidence reveals that CEO’s accounting-based attributes are negatively associated with accruals-based earnings management and positively associated with real earnings management (REM). Further, mandatory IFRS adoption significantly moderates the impact of CEO’s accounting-based traits on earnings-management activities. Research limitations/implications A small number of European firms were studied and, given the long study period, many firms with missing data were eliminated. To avoid a small sample size, countries with few observations were included, which leads to an uneven distribution between observations per country. Practical implications Findings from this paper can help: European firms to consider demographic traits when recruiting or promoting executives; the IASB to improve enforcement mechanisms and make IFRS implementation mandatory; and audit committees to effectively monitor REM. Originality/value This study is unique in providing European evidence for the moderating effect of mandatory IFRS adoption on the relationship between CEOs’ accounting experience/education and earnings management activities. This paper is also relevant as it addresses the effectiveness and efficiency of accounting literates.

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