The moderating role of audit quality on the relationship between auditor reporting and earnings management: empirical evidence from Tunisia

Fakhfakh, Imen; Jarboui, Anis

doi:10.1108/emjb-03-2020-0024

Cited by 26 publications

(20 citation statements)

References 44 publications

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Section: Introductionmentioning

confidence: 99%

“…In an agency setting, information asymmetry between stakeholders and managers creates agency costs. Firms will thus demand independent auditors in order to mitigate opportunistic behaviors (Imen and Anis, 2021;Buchanan et al, 2021). Therefore, the purpose of this paper is to examine the impact of CSR on firm financial performance and highlight the moderating effect of audit quality upon this relationship on a sample of 200 French firms listed during the 2007-2018 period.…”

Section: Introductionmentioning

confidence: 99%

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The impact of corporate social responsibility on firm financial performance: does audit quality matter?

Dakhli

2021

JAAR

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PurposeThe purpose of this paper is to investigate the relation between corporate social responsibility (CSR) and firm financial performance, and how audit quality moderates this relationship.Design/methodology/approachThis study uses panel dataset of 200 French firms listed during 2007–2018 period. The direct and moderating effects were tested by using multiple regression technique.FindingsThe authors find that CSR has a positive impact on firm financial performance proxy with return on assets (ROA), return on equity (ROE) and Tobin's Q (TQ), suggesting that investment in social activities helps firms to achieve better financial results. The authors also find that the improvement effect of CSR on corporate financial performance is more pronounced for firms audited by Big 4 auditors.Research limitations/implicationsOne limit of this study is the selection of independent variables. We are limited to one variable, namely CSR engagement. Further studies may consider other independent variables, such as the age of the company, the type of industry, the composition of the board of directors, etc., in order to provide an in-depth analysis of corporate financial performance drivers.Practical implicationsThe findings have practical implications that may be useful to managers in their management of the firm. They encourage all board members to seriously weigh investing in developing strategies that promote the social behavior components in order to improve overall corporate performance.Originality/valueThe research adds to the current literature on CSR by revealing the impact of external auditor quality on the CSR–financial performance relationship. In addition, it investigates not only the overall CSR ratings but also each of CSR dimensions, namely environmental, social and governance.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

The impact of corporate social responsibility on firm financial performance: does audit quality matter?

Dakhli

2021

JAAR

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“…These two things directly affect the quality and potentially influence each other. Research conducted by (Endri, 2020); (Imen and Anis, 2020); (Ab Wahid and Grigg, 2020); (Trotman and Trotman, 2010) overall argues that competence has a significant effect on audit quality. It is emphasized again from research by (Alzeban, 2019), which states that experience may be necessary for complex decisions but not routine and structured decisions.…”

Section: Theoritical Reviewmentioning

confidence: 99%

Examining Linkage Audit Quality Factors Intervening by Time Budget Pressure

Akbar

2022

Jurnal Akuntansi

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Public accountants are independent auditors who provide services to the general public, especially in auditing financial statements made by their clients. The task of a public accountant is to examine and give an opinion on the fairness of the financial statements of a business entity based on predetermined standards. The public accounting profession is responsible for increasing the reliability of the company's financial statements. The public can obtain reliable financial statement information as a basis for decision-making. The research objective is to answer the phenomenon of the variable, namely the Effect of Auditor Competence, Audit Complexity, Auditor Independence on Audit Quality. The research method uses Multiple Regression Analysis. From the research results obtained the following results Auditor Independence has the most dominant effect on Audit Quality, Audit Complexity also has a significant but negative impact on Audit Quality. Meanwhile, Auditor Competence also significantly impacts Audit Quality.

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“…Some authors claim that there is no positive correlation between EM and the auditor's modified opinion, that is, that the EM is negatively related to the qualified audit opinion. This group of authors includes: Tsipouridou & Spathis (2014) who "examined this relationship in companies listed on the Athens Stock Exchange"; Gajevszky (2014) in companies listed on the Bucharest Stock Exchange; Othman et al (2017) in companies listed on the Bursa Malaysia which is classified as PN17, Garcia-Blandon et al (2014) in companies in Spain, Veronika & Julisar (2020) in companies listed on the Indonesia Stock Exchange, Sharf & Nassar (2021) in companies listed in Amman Stock Exchange in Jordan, Imen & Anis (2021) in Tunisian firms listed on the Tunis Stock Exchange.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

“…As Akbaryan Fard et al (2020) point out, audit quality is the auditor's ability to discover and report important distortions and discover manipulations in net income. This further significantly reduces EM (Imen & Anis, 2021), that is, as Othman & Zegnal (2006) point out, in case of high quality of audit, managers are not willing to perform manipulations through profit management.…”

Section: Introductionmentioning

confidence: 99%

Modified Audit Opinion and Earnings Management in State-Owned Companies: Evidence From Serbia

Đorđević

Spasić

2022

FU Econ Org

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The aim of the author of this paper is to examine the relationship between Earning Management (EM) and modified audit opinion among state-owned companies in the Republic of Serbia. The study sample consists of 64 state-owned companies whose financial statements were subject of audit by State Audit Institution in period 2018-2021. To detect EM, the financial statements of these companies for the four-year period 2018-2021 were used. The results of the study indicate that there is no positive relationship between EM and the auditor's modified opinion, i.e. that the difference in the distribution of the modified opinion in state-owned companies in which EM is identified and those in which EM is not identified is not statistically significant. These results initially point to the conclusion that auditors do not take EM into account when forming opinions, and do not send warning signals to users of financial statements. However, if one looks at the participation of the modified opinion on the financial statements of state-owned companies in which EM is identified, and especially the motive of EM, it can be said that the auditors of the State Audit Institution are adequately dedicated to this issue.

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The moderating role of audit quality on the relationship between auditor reporting and earnings management: empirical evidence from Tunisia

Cited by 26 publications

References 44 publications

The impact of corporate social responsibility on firm financial performance: does audit quality matter?

The impact of corporate social responsibility on firm financial performance: does audit quality matter?

Examining Linkage Audit Quality Factors Intervening by Time Budget Pressure

Modified Audit Opinion and Earnings Management in State-Owned Companies: Evidence From Serbia

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