Impact of voluntary disclosure on earnings management in Malaysian companies: A proposed analysis

Karajeh, Ahmad Ibrahim; Ibrahim, Mohd Yussoff; Lode, Nor Asma

doi:10.1109/istmet.2015.7359074

Cited by 1 publication

(1 citation statement)

References 32 publications

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“…Voluntary disclosure aims to increase the quality of disclosure and the quality of reports submitted to the stakeholders, but the management may use them to mislead users of the reports about the real performance. It was also found that there is a relationship between voluntary disclosure and earnings management (Karajeh, Ibrahim, & Lode, 2015;Shbeilat, 2018).…”

Section: Key Audit Matters and Earnings Managementmentioning

confidence: 97%

The Mediating Effects of Key Audit Matters on the Relationship Between Audit Quality and Earnings Management: Evidence from Jordan

Alqam

Hamshari

Ali

2021

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The relationship between audit quality and earnings management has not been tested with consideration of key audit matters as a mediating variable. This study examined whether audit quality (AQ) decreases earnings management (EM) in shareholding corporations through improving key audit matters (KAMs) in Jordan’s emerging environment. A regression analysis was carried out on a sample that included financial reports and auditor reports of 105 industrial and service shareholdings companies listed on the Amman Stock Exchange (ASE) from 2017 to 2019. The study found a negative relationship between audit quality and earnings management. The results showed that audit quality increases key audit matters, which, in turn, decreases earnings management. Also, the study confirmed the mediating effect of KAMs between audit quality and earnings management. The study confirms the importance of key audit matters to provide more relevant and useful information for the users of financial reports and provides important indications to the regulatory authorities and standards bodies that key audit matters should be given more attention regarding the way that they are presented and disclosed.

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Section: Key Audit Matters and Earnings Managementmentioning

confidence: 97%