Does audit quality influence earnings management in emerging markets? Evidence from Jordan
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)...
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| Format: | Article |
| Language: | English |
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Universidad de Murcia
2020-01-01
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| Series: | Revista de Contabilidad: Spanish Accounting Review |
| Subjects: | |
| Online Access: | https://revistas.um.es/rcsar/article/view/365091 |
| _version_ | 1818757363069353984 |
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| author | Taha Suleiman Almarayeh Beatriz AIBAR-GUZMAN Modar Abdullatif |
| author_facet | Taha Suleiman Almarayeh Beatriz AIBAR-GUZMAN Modar Abdullatif |
| author_sort | Taha Suleiman Almarayeh |
| collection | DOAJ |
| description | 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. |
| first_indexed | 2024-12-18T06:09:44Z |
| format | Article |
| id | doaj.art-bcf6df51de1b431e8080dc3c87763a57 |
| institution | Directory Open Access Journal |
| issn | 1138-4891 1988-4672 |
| language | English |
| last_indexed | 2024-12-18T06:09:44Z |
| publishDate | 2020-01-01 |
| publisher | Universidad de Murcia |
| record_format | Article |
| series | Revista de Contabilidad: Spanish Accounting Review |
| spelling | doaj.art-bcf6df51de1b431e8080dc3c87763a572022-12-21T21:18:26ZengUniversidad de MurciaRevista de Contabilidad: Spanish Accounting Review1138-48911988-46722020-01-0123110.6018/rcsar.365091Does audit quality influence earnings management in emerging markets? Evidence from JordanTaha Suleiman AlmarayehBeatriz AIBAR-GUZMANModar AbdullatifThis 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.https://revistas.um.es/rcsar/article/view/365091Audit qualityAuditor sizeAudit feesEarnings managementDiscretionary accrualsJordan |
| spellingShingle | Taha Suleiman Almarayeh Beatriz AIBAR-GUZMAN Modar Abdullatif Does audit quality influence earnings management in emerging markets? Evidence from Jordan Revista de Contabilidad: Spanish Accounting Review Audit quality Auditor size Audit fees Earnings management Discretionary accruals Jordan |
| title | Does audit quality influence earnings management in emerging markets? Evidence from Jordan |
| title_full | Does audit quality influence earnings management in emerging markets? Evidence from Jordan |
| title_fullStr | Does audit quality influence earnings management in emerging markets? Evidence from Jordan |
| title_full_unstemmed | Does audit quality influence earnings management in emerging markets? Evidence from Jordan |
| title_short | Does audit quality influence earnings management in emerging markets? Evidence from Jordan |
| title_sort | does audit quality influence earnings management in emerging markets evidence from jordan |
| topic | Audit quality Auditor size Audit fees Earnings management Discretionary accruals Jordan |
| url | https://revistas.um.es/rcsar/article/view/365091 |
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