SavedAdd your journal

Journals / Business and Economics Research Journal / 2019 / Cilt: 10 - Sayı: 2

The Impact of Auditor Qualifications on Earnings Management of Companies Listed on the Borsa Istanbul Industrial Index

Gökberk CAN
Pages
373–390
DOI
—
🏛️Bibliographic metadata and full text access for this article are provided via DergiPark.
DergiPark Record ↗
✨

AI Summary & Key Takeaways

AI Insight
⚡ TL;DR(Too Long; Didn't Read)

According to the results, independent auditor qualifications (audit firm and engagement partner) has no impact on the real activities manipulation.

📌 3 Key Takeaways

🎯
Objective & Hypothesis:This research aims to reveal whether independent auditor’s (as the real person and the legal entity) qualifications (audit firm size, audit opinion, audit gender, audit firm specialization, audit firm rotation, geographical difference) have any effect on earnings management via discretionary accruals and real activities manipulations by using a panel data regression analyses of 162 units over 5 years (2011-2015).
📊
Key Findings & Data:The results show that an independent audit by Big-4 firms has a decreasing effect on discretionary accruals.
💡
Conclusion & Impact:According to the results, independent auditor qualifications (audit firm and engagement partner) has no impact on the real activities manipulation.
🔬Design:Research Article
📍Scope:2011-2015 Verileri
⚙️Variables:Domain Parameters

Özet

This research aims to reveal whether independent auditor’s (as the real person and the legal entity) qualifications (audit firm size, audit opinion, audit gender, audit firm specialization, audit firm rotation, geographical difference) have any effect on earnings management via discretionary accruals and real activities manipulations by using a panel data regression analyses of 162 units over 5 years (2011-2015). According to the results, independent auditor qualifications (audit firm and engagement partner) has no impact on the real activities manipulation. The results show that an independent audit by Big-4 firms has a decreasing effect on discretionary accruals. Earnings management via discretionary accruals increases when the local audit firms conduct the audit. The audit firms with diversified expertise decrease the earnings management via accruals. The results also confirm that disclaimer of opinion signals an increase in the discretionary accruals in Borsa İstanbul.

🔖

Cite This Article

CAN, G. (2019). The Impact of Auditor Qualifications on Earnings Management of Companies Listed on the Borsa Istanbul Industrial Index. Business and Economics Research Journal, Cilt: 10 - Sayı: 2, 373–390. https://ajindex.com/articles/142686

📄 Full Text PDF Viewer

📄

PDF görüntüleyici hazırlanıyor...

References (11)

  1. Allen, A., & Woodland, A. (2010). Education requirements, audit fees, and audit quality. Auditing: A Journal of Practice & Theory, 29(2), 1–25. https://doi.org/https://doi.org/10.2308/aud.2010.29.2.1
  2. Arnedo, L., Lizarraga, F., & Sánchez, S. (2008). Going-concern uncertainties in pre-bankrupt audit reports: New evidence regarding discretionary accruals and wording ambiguity. International Journal of Auditing, 12(1), 25–44. https://doi.org/10.1111/j.1099-1123.2008.00368.x
  3. Bamber, E. M., & Bamber, L. S. (2009). Discussion of “mandatory audit partner rotation, audit quality, and market perception: Evidence from Taiwan.” Contemporary Accounting Research, 26(2), 393–402. https://doi.org/10.1506/car.26.2.3
  4. Bandyopadhyay, S. P., Chen, C., & Yu, Y. (2014). Mandatory audit partner rotation, audit market concentration, and audit quality: Evidence from China. Advances in Accounting, 30(1), 18–31. https://doi.org/10.1016/J.ADIAC.2013.12.001
  5. Behn, B. K., Carcello, J. V, Hermanson, D. R., & Hermanson, R. H. (1999). Client satisfaction and big 6 audit fees. Contemporary Accounting Research, 16(4), 587–608. https://doi.org/10.1111/j.1911-3846.1999.tb00597.x
  6. Bishop, C. C., Hermanson, D. R., & Houston, R. W. (2013). PCAOB inspections of international audit firms: Initial evidence. International Journal of Auditing, 17(1), 1–18. https://doi.org/10.1111/j.1099-1123.2012.00453.x
  7. Boone, J. P., Khurana, I. K., & Raman, K. K. (2010). Do the big 4 and the second-tier firms provide audits of similar quality? Journal of Accounting and Public Policy, 29(4), 330–352. https://doi.org/10.1016/j.jaccpubpol.2010.06.007
  8. Boone, J. P., Khurana, I. K., & Raman, K. K. (2015). Did the 2007 PCAOB disciplinary order against Deloitte impose actual costs on the firm or improve its audit quality? The Accounting Review, 90(2), 405–441. https://doi.org/10.2308/accr-50867
  9. Braiotta, L. J. (2005). The audit committee handbook (4th ed.). Hoboken, NJ, USA: John Wiley & Sons, Inc. Breesch, D., & Branson, J. (2009). The effects of auditor gender on audit quality. The IUP Journal of Accounting Research & Audit Practices, VIII(3&4), 78–108.
  10. Cameran, M., Francis, J. R., Marra, A., & Pettinicchio, A. (2015). Are There adverse consequences of mandatory auditor rotation? Evidence from the Italian experience. Auditing: A Journal of Practice & Theory, 34(1), 1–24. https://doi.org/10.2308/ajpt-50663
  11. Cassell, C. A., Giroux, G., Myers, L. A., & Omer, T. C. (2013). The emergence of second-tier auditors in the US: Evidenc