Institutional Activism, Auditor’s Choice and Earning Management after the Enron Collapse: Evidence from France

Azibi, Jamel; Azibi, Hamza; Tondeur, Hubert

doi:10.5539/ibr.v10n2p154

Cited by 3 publications

(5 citation statements)

References 29 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…These preponderance of scandals have resulted in the mandate for higher audit quality as a key strategy, to checkmate the occurrence of earnings management. This is premised on previous empirical studies such as Sitanggang, Karbhari, Matemilola and Ariff (2019), Lopes (2018), Akintayo and Salman, (2018), Azibi, Azibi and Tondeur (2017), Alzoubi (2016), Nawaiseh (2016), Aliyu, Musa and Zachariah (2015) and Jordan, Clark and Hames (2010). Audit is an assurance engagement activity, which lends credibility to financial reports, prepared by management to render stewardship to owners of businesses.…”

Section: Introductionmentioning

confidence: 96%

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

Soyemi

Olufemi

Adeyemie

2020

Malaysian Management Journal

View full text Add to dashboard Cite

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.

show abstract

Section: Introductionmentioning

confidence: 96%

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

Soyemi

Olufemi

Adeyemie

2020

Malaysian Management Journal

View full text Add to dashboard Cite

show abstract

“…In attempt to prevent future instances of fraudulent behaviour, in 2002, the US Congress introduced the Sarbanes-Oxley Act (SOX), enforcing the responsibility for internal controls on the management and auditors with 11 chapters, intended to reshape the accounting system. Under this Act, the Public Company Accounting Oversight Board (PCAOB) was created to supervise the audit firms (Azibi, 2017). However, A. R. Abdel-Khalik (2016) is sceptical about the ability of SOX alone to prevent the corruption at the levels of the CEO and CFO.…”

Section: Broader Market Effects Resulting From the Rise And Fall Of Ementioning

confidence: 99%

“…For instance, in France, a High Committee of Accounting was established by the financial security act of 2003. The Committee is a French equivalent of the US PCAOB (Azibi, 2017). Now, after almost two decades, we can judge on the effects of the above mentioned reforms.…”

Section: Broader Market Effects Resulting From the Rise And Fall Of Ementioning

confidence: 99%

The Role of Financial Markets in the Case of Enron

Konar¹

2018

View full text Add to dashboard Cite

The subject of this article is the case of Enron and its interrelations with the financial markets. The purpose of this article is to produce a review of scientific research, conducted on the Enron case, and with its help to analyse the case from the distance of almost two decades. This article provides an analysis on the role financial instruments played in the downfall of Enron, the broader market effects resulting from the rise and fall of Enron and recommendations of risk mitigation techniques that could have been applied to minimize Enron's risk profile. The work is exploratory in nature and is based on an extensive review of earlier relevant studies on the various aspects of the Enron case and its interrelation with financial markets. The conducted analysis of the recent research publications has shown that financial instruments and the lack of legislation and accounting standards, regulating the involved transactions, played a crucial role in Enron's downfall.

show abstract

“…It can be argued that the audit information system may be vulnerable because of people who either lack the necessary capacity and skills or who have high expertise but weak professional ethics exploiting audit information security gap for their own advantage or other negative purposes. For example, in the process of conducting audit engagements at the Enron corporation (a well-known and huge global energy-trading company), the independent auditors, who lacked integrity, transparency, independence and objectivity, ignored a variety of irregular and suspect accounting reports highlighted by the auditing information security system and through their actions were responsible for bringing the corporation to the verge of bankruptcy [21]. Thus, while information technology may effectively support system security, the people involved can compromise this security.…”

Section: Systems and Social Forcesmentioning

confidence: 99%

“…In addition, weak auditing standards appear to cause negative impacts not only for audit activities but also for the government's economic macro-control. For example, in the United States of America, gaps and weaknesses in the American auditing and accounting system led to corporate misconduct and fraud and problems related to the auditors' independence and professional ethics, resulting in huge financial scandals in 2001 [21]. Thus, scenario 2 may have negative implications for the ability of the Vietnam Government to set forth appropriate budget policies and establish economic macro-control.…”

Section: Scenario 2: Non International Auditing Standards and Technology-driven Systemmentioning

confidence: 99%

Scenarios for Change Management Models of the Audit Process of the State Audit Office of Vietnam

Minh¹

2018

AJTAB

View full text Add to dashboard Cite

The audit process of the State Audit Office of Vietnam (SAV) is inadequate in several ways. This may have a negative influence on the quality and effectiveness of the performance of the SAV. Changing the SAV audit process is thus a strategy that has the potential to contribute significantly to the SAV development. The purpose of this paper is to develop scenarios for change management models of SAV's audit process in order to identify the most possible scenario which represents the most advantageous and positive features of the change model of SAV audit process. This paper presents literature underpinning the identification of the key driving forces involved in shifting SAV's audit process and document review to be employed during the research. The research has identified and assessed four different but plausible scenarios based on the major drivers of systems and social forces combined with international auditing standards. The Australian public sector auditing model, which may portray to some extent the characteristics of scenario 1 (international auditing standards and technology-driven system), represents the most desirable prospect. It is expected that this research will contribute to the development of an effective audit process for SAV which serves as a mechanism to ensure the transparency, and effectiveness of public sector expenditure.

show abstract

Institutional Activism, Auditor’s Choice and Earning Management after the Enron Collapse: Evidence from France

Cited by 3 publications

References 29 publications

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

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

The Role of Financial Markets in the Case of Enron

Scenarios for Change Management Models of the Audit Process of the State Audit Office of Vietnam

Contact Info

Product

Resources

About