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Please use this identifier to cite or link to this item: http://hdl.handle.net/1959.3/239705
- Criticisms of auditors and earnings management during the Asian economic crisis
- Johl, Shireenjit Kaur; Jubb, Christine A.; Houghton, Keith A.
- Auditors were criticised during and after the Asian economic crisis for supplying variable quality across global audit markets. This study examines the level of earnings management as measured by discretionary accruals in the pre-crisis compared to the post-crisis periods as they impacted Malaysia. Both the Jones (1991) and earnings per share frequency distribution methods are used to examine earnings management behaviour. As hypothesised, the pre-crisis period is associated with significantly higher levels of absolute discretionary accruals and increased propensity to meet or beat the prior year earnings per share, whereas the post-crisis period is not. This finding is consistent with auditors responding to the criticisms that were made. However, the propensity to avoid losses is found to be higher in the post-crisis period, indicating that earnings management is not fully constrained.
- Publication type
- Book chapter
- Ethics and auditing / Tom Campbell and Keith Houghton (eds.), Chapter 10, pp. 193-217
- Publication year
- Asian economic crisis; Auditors; Earnings management
- ANU ePress
- 9781920942250, 1920942254
- Publisher URL
- Copyright © 2005 ANU E Press.
- Peer reviewed