Auditor Tenure and Earnings Management
| Autor: | Wang, Hsueh-Fang, 王雪芳 |
|---|---|
| Rok vydání: | 2006 |
| Druh dokumentu: | 學位論文 ; thesis |
| Popis: | 94 Before the mandatory audit-partner rotation is brought into practice, the relationships between auditor tenure and earnings quality have been debated for a long time. Though there are no laws that require listed companies to change auditors regularly, the companies whose financial reports are audited by the same CPA in the recent five consecutive years are subject to be investigated physically by TSE or OTC. In order to evaluate the effect of mandatory audit-partner rotation on earnings quality, we need more evidence on the relation between audit tenure and earnings quality. Prior studies about auditor tenure and earnings quality mostly adopt single measure approach or multi-measures approach for one variable: auditor tenures or earnings quality, no study uses multi-measures approach for these two variables. In order to get more stable and reliable empirical results, this study is aimed at examining the relation between audit tenure and earnings quality based on multi-measures for audit tenure and earnings quality, the most recent data and the longest sampling years. According to the system of dual auditors in Taiwan, this study calculates three auditor tenures: dual auditor tenure, auditor firm tenure and dual auditor-auditor firm tenure. And, this study estimates seven discretionary accruals: current ROA adjusted Jones Model, past ROA adjusted Jones Model, current ROA adjusted Modified Jones Model, past ROA adjusted Modifed Jones Model (Kothari et al., 2005), traditional Jones Model, traditional Modified Jones Model, and current accruals (Myers et al., 2003). The empirical results evidence that the relationships between auditor tenure and discretionary accrual are almost significantly negative. This result is robust and is consistent with prior studies that the longer auditor tenure the better earning quality. That is, the abilities authorities have on earning management are decreased in a longer auditor-client relationship. In other words, the evidence of this study does not support the mandatory audit-partner rotation. |
| Databáze: | Networked Digital Library of Theses & Dissertations |
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