Auditor's choice and earning management after Enron scandals: empirical approach in French context

Azibi, Jamel; Rajhi, Mohamed Tahar

doi:10.1504/ijca.2013.058690

Cited by 5 publications

(2 citation statements)

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“…Empirical results demonstrate unclear effect of the joint audit on audit quality in these two countries. In the same perspective, Azibi and Rajhi (2013) studied the audit quality in French context after the Enron Scandal between 2002 and 2005. They find that are no difference of audit quality between Big and Non-Big audit firm.…”

Section: Introductionmentioning

confidence: 99%

Joint audit and financial scandal: The case of the French context

Azibi¹

2018

Int. j. adv. appl. sci.

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The European Commission issued a proposal that encouraged the practice of joint audit on a voluntary basis. It recommended that mandatory audit firm rotation is extended from six years to nine years if joint audits are performed. This is considered as a new mechanism that increases audit quality and auditor independence. This new orientation of the EC Green Paper has an important impact on investor perception during the financial scandal announcement. In order to answer this question, we investigate the stock market reaction of SBF 250 after the disclosure of the financial scandal in presence of joint audit. Our sample is composed of 140 French listed enterprises. We use event study method and OLS regression. The empirical results demonstrate that the stock market of Non Big-Four clients does not significantly react compared to the firms audited by at least one Big Four in France. Contrary to this finding, the stock market reaction of the firms audited by two Big Four was significantly reacted compared to the enterprises audited by one Big at least in France. Those results demonstrate that joint audit with at least one Non-Big encouraged and especially in the Financial scandal periods and resolve the problem associated with the audit market concentration.

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Section: Introductionmentioning

confidence: 99%

Joint audit and financial scandal: The case of the French context

Azibi¹

2018

Int. j. adv. appl. sci.

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“…Davis et al (2000) in their study concluded that there is negative and significant relationship between audit quality and earnings management. In addition, in a study which performed by Azibi and Rajhi (2008) and Abdul Rahman and Ali (2006), found that audit firm size has no effect on the reduction of discretionary accruals. The value of accounting information is a function of its credibility, and a central objective of audits is to enhance the quality of financial reporting.…”

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confidence: 98%

The Effect of Overvalued Equity on the Relationship between Audit Quality and Earning Quality (Evidence from Iran)

Ebrahimie¹,

Bahraminasab²,

Khorram³

2015

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The purpose of this article is to investigate the effect of overvalued equity on the relationship between audit quality and earning quality. In this article audit firm size, auditor industry specialization and auditor tenure were used as audit quality variable. The sample population consists of 189 companies listed in Tehran stock Exchange during the period 2008 to 2012. To test the hypotheses, OLS in Eviews has been used and investigation method of data is panel. The results show a reverse relationship between all audit quality variables and absolute discretionary accruals indicating that high audit quality causes higher earning quality. But the existence of overvalued equity cause decreasing or reversing of these relationships, in other words, when a firm is highly valued the accruals' decreasing effect of high quality auditors is reduced.

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Playing Follow-the-leader Misstating Financial Statements: Impact on CEO Compensation and Cost of Capital

Wood¹,

Smith²

2021

Research on Professional Responsibility and Ethics in Accounting

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Auditor's choice and earning management after Enron scandals: empirical approach in French context

Cited by 5 publications

References 40 publications

Joint audit and financial scandal: The case of the French context

Joint audit and financial scandal: The case of the French context

The Effect of Overvalued Equity on the Relationship between Audit Quality and Earning Quality (Evidence from Iran)

Playing Follow-the-leader Misstating Financial Statements: Impact on CEO Compensation and Cost of Capital

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