Audit Quality and Earnings Management in the Tunisian Context

Zgarni, Inaam; Khmoussi, Hlioui; Zehri, Fatma

doi:10.5296/ijafr.v2i2.2065

Cited by 45 publications

(44 citation statements)

References 45 publications

(94 reference statements)

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“…While some empirical studies have reported the abilities of audit quality to significantly constrain earnings management [6][7][8] others have reported otherwise.…”

Section: Review Of Empirical Studiesmentioning

confidence: 99%

Audit Quality and Earnings Management among Nigerian Listed Deposit Money Banks

Olabisi¹,

To²,

To³

2017

Int J Account Res

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IntroductionIn recent times, the call for reliable financial reporting has gained prominence in Nigeria and global economy at large. The capability or incapability of banks to effectively fulfill intermediate mandate has been the crux of many financial crises. Mediating between the surplus and deficit units within the economy expedites distribution of national savings, thereby improving investments and national output. In 2005, the Central Bank of Nigeria mandated every Nigerian bank to increase capital base from 2 billion naira to 25 Billion Naira in order to enhance competitiveness in the international market. Noteworthy capital market expectations were raised and banks were under pressure to achieve survival and generate higher returns to shareholders. This pressure from the Central Bank of Nigeria has occasioned banks falsifying accounts, inflating earnings and capital. The need for reliable reports has led to statutory audit that provides independent authentication of financial statements prepared by banks' directors.Auditors are instructed to report financial misdemeanors in company's accounts to increase transparency and accountability through fraud detection. Earnings are made up of accruals and cash items and accruals are basically controlled by company's stewards. Management can bloat performance of company and future earnings predictions through manipulation of accruals resulting in earnings management. Financial reports contain accounting information which different users use to appraise firm's performance. Investors use cash flow statement to make investment decisions thereby creating room for highly motivated and intelligent management teams to manipulate the real economic operations to influence the true picture of a company's cash flow from operations. Since accrual accounting measures the performance of company by recognizing economic events irrespective of when transactions occur. Earnings management is therefore, discovered by conducting tests on the components of accrual assumed to be at the managerial discretionary accruals thereby revealing information asymmetries. Accounting scandals experienced in the last few years have affected the regulators' trust of financial statements. This scandal and its consequent results are reasons for drawing attention to quality and reliability of financial statements in the banking sector. Therefore, the absence of investors' confidence in the reported earnings influence the financial market because investors are major players in ensuring availability of capital to support the economic system. Given the above state, this study seeks to assess the effect of audit quality on earnings management in Nigerian listed deposit money banks. The broad objective of this study is to identify relationship between audit quality and earnings management of Nigerian listed money deposit banks while to assess relationship among joint audit, auditor specialization, auditor independence and audit tenure on the earnings management in the listed deposit money banks in Nigeria wo...

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“…While some empirical studies have reported the abilities of audit quality to significantly constrain earnings management [6][7][8] others have reported otherwise.…”

Section: Review Of Empirical Studiesmentioning

confidence: 99%

Audit Quality and Earnings Management among Nigerian Listed Deposit Money Banks

Olabisi¹,

To²,

To³

2017

Int J Account Res

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show abstract

“…Ini ditunjukkan dengan aliran kas abnormal yang lebih rendah. Inaam et al (2012) menegaskan bahwa auditor yang memiliki spesialisasi industri mempresentasikan suatu dimensi penting dari kualitas audit. Auditor yang memiliki spesialisasi industri menunjukkan suatu dimensi penting kualitas audit.…”

Section: Auditor Eksternal Dan Manajemen Labaunclassified

“…Auditor lebih mudah untuk mengetahui akrual ini. Hasil penelitian ini konsisten dengan hasil penelitian yang dilakukan oleh Inaam et al (2012) yang menemukan bahwa auditor berkualitas tidak mampu mencegah praktik manajemen aktivitas riil. Ini kemungkinan auditor tidak dapat memainkan perannya untuk mengurangi manipulasi aktivitas riil karena manipulasi ini lebih sulit bagi auditor eksternal, regulator, dan stakeholder lain untuk mendeteksi manipulasi aktivitas riil dibanding manajemen laba akrual.…”

Section: Hasil Dan Pembahasanunclassified

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Pengaruh Kualitas Auditor terhadap Manipulasi Aktivitas Riil

Sanjaya

2016

jak

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ABSTRAKTujuan penelitian ini adalah untuk menginvestigasi dampak kualitas audit pada manipulasi aktivitas riil. Kualitas audit diproksikan oleh afiliasi dengan auditor big four dan non-big four. Dalam artikel ini, auditor eksternal yang berafiliasi dengan big four memiliki kualitas yang lebih besar dalam hal spesialisasi dan reputasi dibanding auditor non-big four. Manipulasi aktivitas real adalah salah satu jenis manajemen laba. Studi ini menggunakan beberapa proksi untuk manipulasi aktivitas riil. Sampel dalam artikel ini adalah perusahaan-perusahaan manufaktur yang terdaftar di Bursa Efek Indonesia. Periode studi ini adalah tiga tahun. Penelitian ini membuktikan bahwa kualitas audit memiliki dampak negatif dan signifikan pada manipulasi aktivitas riil. Hasil ini mengindikasikan bahwa auditor reputasian dan spesialisasian dapat mencegah atau mengurangi manipulasi aktivitas riil.Kata kunci: Kualitas auditor, manipulasi aktivitas riil, manajemen laba, big four, dan nonbig four. ABSTRACT PENDAHULUANTujuan paper ini adalah untuk menginvestigasi pengaruh kualitas audit terhadap manajemen laba riil atau manipulasi aktivitas riil. Kualitas audit diproksikan dengan auditor yang berafiliasi dengan big four dan tidak berafiliasi dengan big four (non big four). Manipulasi aktivitas riil ini akan terdeteksi dalam arus kas operasi, biaya produksi, dan biaya diskresioner. Manajer yang menggunakan manipulasi aktivitas riil dengan cara untuk meningkatkan arus kas operasi akan menyebabkan piutang dan arus kas operasi yang lebih berfluktuatif. Hal ini juga terjadi, jika manajer menggunakan biaya produksi dan biaya diskresioner untuk melakukan manajemen laba riil juga berdampak pada harga pokok penjualan suatu perusahaan. Penelitian ini menggunakan model Roychowdhury (2006) dalam pengukuran manajemen laba riil.Paper ini merupakan pengembangan penelitian yang dilakukan oleh Sanjaya (2008) yang menemukan auditor berkualitas dapat mengurangi praktik manajemen laba. Manajemen laba dalam paper Sanjaya (2008) diproksikan dengan akrual diskresioner. Oktarina dan Hutagaol (2009) menemukan bahwa manajemen perusahaan memanipulasi aktivitas riil melalui aliran kas operasi. Ratmono (2011) menemukan bahwa manajer perusahaan melakukan manajemen laba riil bagi

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“…Burnett et al (2012) find that when the financial reports are audited by high quality auditor, the managers tend to swap the accrual based EM with real EM. Similarly, Inaam et al (2012) demonstrate that auditor industry specialization negatively effects accrual based EM. Sun and Liu (2013) suggest that the auditor industry specialization complements board independence in the governance process.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 90%

Auditor’s Characteristics and Earnings Management in India

Rajpal

Jain

2018

AFR

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This study investigates whether auditor’s characteristics such as its independence and professional quality act as a deterrent to earnings management in India. The existing evidence on the relationship of auditor’s independence and quality with earnings management is not conclusive. The said relationship has not been examined in the context of Indian companies. The study uses a panel data of 1,600 firm years. The study provides evidence on the presence of knowledge spillover hypothesis as negative relationship is found between fees for non-audit services and earnings management. The study does not find any significant relationship of EM with industry specialization of the auditor and size of the auditor. The results are consistent under various robustness checks.

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Audit Quality and Earnings Management in the Tunisian Context

Cited by 45 publications

References 45 publications

Audit Quality and Earnings Management among Nigerian Listed Deposit Money Banks

Audit Quality and Earnings Management among Nigerian Listed Deposit Money Banks

Pengaruh Kualitas Auditor terhadap Manipulasi Aktivitas Riil

Auditor’s Characteristics and Earnings Management in India

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