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Full-Text Articles in Business
Do Abnormally High Audit Fees Impair Audit Quality?, Jong-Hag Choi, Jeong-Bon Kim, Yoonseok Zang
Do Abnormally High Audit Fees Impair Audit Quality?, Jong-Hag Choi, Jeong-Bon Kim, Yoonseok Zang
Research Collection School Of Accountancy
This study examines whether and how audit quality proxied by the magnitude of absolute discretionary accruals is associated with abnormal audit fees, that is, the difference between actual audit fee and the expected, normal level of audit fee. The results of various regressions reveal that the association between the two is asymmetric, depending on the sign of the abnormal audit fee. For observations with negative abnormal audit fees, there is no significant association between audit quality and abnormal audit fee. In contrast, abnormal audit fees are negatively associated with audit quality for observations with positive abnormal audit fees. Our findings …
Auditor Reputation And Earnings Management: International Evidence From The Banking Industry, Kanagaretnam Kiridaran, Chee Yeow Lim, Gerald J. Lobo
Auditor Reputation And Earnings Management: International Evidence From The Banking Industry, Kanagaretnam Kiridaran, Chee Yeow Lim, Gerald J. Lobo
Research Collection School Of Accountancy
We examine the relation between auditor reputation and earnings management in banks using a sample of banks from 29 countries. In particular, we examine the implications of two aspects of auditor reputation, auditor type and auditor industry specialization, for earnings management in banks. We find that both auditor type and auditor industry specialization moderate benchmark-beating (loss-avoidance and just-meeting-or-beating prior year’s earnings) behavior in banks. In addition, we find that once auditor type and auditor industry specialization are included in the same tests, only auditor industry specialization has a significant impact on constraining benchmark-beating behavior. In separate tests related to income-increasing …
Enron Vs. General Electric: Is Earnings Management Worth The Risk?, Brett Robertson
Enron Vs. General Electric: Is Earnings Management Worth The Risk?, Brett Robertson
Honors Theses
The main objective of this paper is to provide a review on why companies use earnings management and the benefits and consequences as a result. There is a large grey area between aggressive accounting and outright fraud and this paper focuses on narrowing down that area so companies know when to stop. General Electric is an example of a company that used earnings management to its advantage because they used it cautiously. However, there is the other side where earnings management started off small and ended up spiraling out of control like with Enron. This paper will examine both how …