Do audit firm and audit costs/fees influence earnings management in Swedish municipalities?
| Autor: | Mattias Haraldsson, Pierre Donatella, Torbjörn Tagesson |
|---|---|
| Jazyk: | angličtina |
| Rok vydání: | 2019 |
| Předmět: |
audit fee
Public Administration Sociology and Political Science municipality Accrual business.industry 05 social sciences audit cost Accounting Audit Private sector 0506 political science Earnings management audit firm health services administration 0502 economics and business 050602 political science & public administration Business 050203 business & management health care economics and organizations earnings management Business Administration Företagsekonomi |
| Popis: | Previous research on the private sector shows that auditors and auditing firms areimportant actors in ensuring high-quality reporting based on accrual accounting. Theaim of this study is to explore whether audit firms and audit costs/fees influencemunicipalities’ probability of applying earnings management in their annual accounts.The empirical data, which covered the financial years 2011–13, were handpicked fromannual reports or retrieved from other sources. In general, our study shows that theprobability of earnings management increased if audit costs/fees increased. However,there were differences regarding the probability of earnings management relating towhich audit firm was engaged. This implies that audit quality is a factor that affects theprobability of earnings management in Swedish municipalities. The study also indicatesthat different audit firms make different trade-offs between professional versus commerciallogics, and that this is reflected in the clients’ propensity to engage in earningsmanagement. |
| Databáze: | OpenAIRE |
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