Effect of Audit Quality on Earnings Management of Listed Oil Marketing Companies in Nigeria

Tyokoso, Gabriel M.

doi:10.2139/ssrn.3492016

Cited by 8 publications

(13 citation statements)

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“…Previous studies, such as Sumiadji et al (2019) found audit firm size and audit tenure have an impact on earnings quality, and at the same time, they found audit specialization has no impact on earnings quality. Moreover, some other studies, like Tyokoso et al (2016) found that there are positive association between audit size, audit specialization and negative association with earnings quality. A research conducted by Zakaria and Daud (2013) also found that the Big 4 auditors have a significant and positive impact on earnings response coefficient (ERC).…”

Section: Hypotheses Developmentmentioning

confidence: 88%

“…The need for financial reporting arises originally because of the separation of ownership, management and control in the recent times of business organizations. Financial reporting is one of the primary responsibilities of the firms' management that enables them to give an account of their stewardship (Tyokoso et al, 2016). So, the role of auditor is to plan and perform audits to obtain reasonable assurance that the financial statements are free of material misstatements and to express their opinion on fair presentation of the financial statements (Christensen et al, 2016).…”

Section: Introductionmentioning

confidence: 99%

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Direct and Mediated Associations among Audit Quality, Earnings Quality, and Share Price: The Case of Jordan

Afifa¹,

Alsufy²,

Abdallah³

2020

IJEBA

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Purpose: The current study aims to investigate the relationship between audit quality and the share price in Jordan as a developing market. Moreover, it also uses the role of earnings quality as a mediator factor in the study model. Design/Approach/Methodology: The study sample is comprised of all Jordanian industrial public shareholding companies listed in Amman Stock Exchange during the years 2010 to 2018. Therefore, this study uses a panel data analysis on financial disclosures. Findings: The study concluded that a high audit quality and a high earnings quality separately increase the share price. The earnings quality partially mediates the relationship between audit quality and the share price. It was also found that a high audit quality does not improve earnings quality of the targeted companies. Practical Implication: The findings can be used in efforts to: (i) identify the level of Jordanian market control over audit quality and earnings quality with evidence; (ii) provide more explanations on the importance of audit quality and quality of financial information in the biasness environment; (iii) the results of the this study will be more important for the investors, management, decisions makers, policy makers, and other interested parties; (iv) the findings of the study help the policy makers to adopt good regulations to improve the transparency in reporting the financial information that affects the share price. Originality/Value: The study is an original study and it adds to scholarly debate on effect of audit quality and earnings quality on the share price in Jordan as a developing market. It also uses the role of earnings quality as a mediator factor in the relationship between audit quality and the share price.

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Section: Hypotheses Developmentmentioning

confidence: 88%

Section: Introductionmentioning

confidence: 99%

Direct and Mediated Associations among Audit Quality, Earnings Quality, and Share Price: The Case of Jordan

Afifa¹,

Alsufy²,

Abdallah³

2020

IJEBA

View full text Add to dashboard Cite

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“…Besides a few examples of incidence of accounting manipulations, the paucity of scholarly studies in this area is another justification. The few that are available are conducted along sectoral dimensions, for example, Mohammed & Abibakar, 2018;Akintayo &Salman, 2018 andOlabisi, Agbatoogun &Akinrinlola, 2017 were conducted in the banking industry; Alao &Gbolagade, 2019 andTyokoso andTsegba (2015) were within the oil and gas industry. The continued dominance by Big4 audit firms in the Nigerian audit market alongside weak nature of her corporate governance mechanism coupled with little or no litigation risk against auditors are other motivations for this study.…”

Section: Introductionmentioning

confidence: 99%

External Audit(or) Quality and Accrual Earnings Management: Further Evidence From Nigeria

Soyemi

Olufemi

Adeyemie

2020

Malaysian Management Journal

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Hinged on the quest for quality financial information, this study examined the influence of audit quality on restricting the incidence of accrual-based earnings management among 30 quoted non-financial firms in Nigeria, an emerging country which provides a rich institutional background and cultural setting different from developed nations. Secondary data were gathered from annual reports and audited financial statements for 11 years from 2008-2018. These firms were selected using stratified sampling technique. Thereafter, panel ordinary least square technique was used to estimate specified model for the study. While the descriptive statistics revealed the absence of accrualbased manipulation of earnings among quoted non-financial firms in Nigeria, the multivariate fixed effects ordinary least square depicted that audit quality variables adopted are mutually and statistically significant in explaining 49 percent changes in earnings management. Further, audit tenure and auditor independence exhibited positive and significant relationship, while total assets as the control variable, displayed a negative and significant influence on earnings management. Surprisingly, the size of audit firm appeared positive but statistically insignificant. Consequently, the relevant authorities and policy makers should not only sustain but improve on the current practice of audit engagement partner and/or auditor switch after certain years of continuous engagement to enhance their independence and reduce client-auditor engagement periods to avoid familiarity threat.

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“…Recently, Tyokoso and Tsegba (2015) investigated the effect of audit quality on earnings management of listed oil marketing companies in Nigeria for the period 2004-2013. The dependent variable earnings management represented by Discretionary Accruals (DA) was estimated using the modified Jones model while the independent variable audit quality was represented by audit firm size, auditor industry specialization and auditor tenure.…”

Section: Empirical Reviewmentioning

confidence: 99%

Audit Quality Effects on Earnings Management of Manufacturing Firms in Nigeria: A Comparative Study of Pre- and Post-International Financial Reporting Standard (IFRS) Period

2019

RJFA

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This study examined the effect of audit quality proxied by Auditors' Independence (ADI), Audit Firm Size (AFS), Auditor Tenure (ADT) and Audit Firm Specialization (ADS) on shareholders' earnings (measured as Earnings per Share -EPS) and stock performance (measured as Market Price of Stock -MPS) of listed manufacturing companies in Nigeria, in the pre-and post-International Financial Reporting Standard (IFRS) periods. To achieve this, the study used eleven (11) listed manufacturing companies listed companies that had consistently published their audited annual financial reports from 2009 to 2018. Descriptive statistics, correlation analysis and Ordinary Least Square (OLS) univariate and multiple regression technique were adopted to analyse data obtained, with the ex-post facto research design employed in the methodology. The following results were obtained from the test of hypotheses. Auditors independence, audit firm size and auditors firm specialization have significant and positive impact on EPS and MPS. However, auditors' tenure was found to significantly affect both EPS and MPS negatively. The IFRS moderated model results revealed that audit quality variables have higher and more positive impact on EPS and MPS in the post-IFRS period, relative to the pre-IFRS, with their effects being statistically significant using the wald restriction test. The findings have direct implication on earnings management and stock performance in the Nigerian Manufacturing Industry.

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Effect of Audit Quality on Earnings Management of Listed Oil Marketing Companies in Nigeria

Cited by 8 publications

References 0 publications

Direct and Mediated Associations among Audit Quality, Earnings Quality, and Share Price: The Case of Jordan

Direct and Mediated Associations among Audit Quality, Earnings Quality, and Share Price: The Case of Jordan

External Audit(or) Quality and Accrual Earnings Management: Further Evidence From Nigeria

Audit Quality Effects on Earnings Management of Manufacturing Firms in Nigeria: A Comparative Study of Pre- and Post-International Financial Reporting Standard (IFRS) Period

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