Please use this identifier to cite or link to this item: http://hdl.handle.net/1959.3/239674

Title

Audit quality: earnings management in the context of the 1997 Asian crisis

Author(s)

Johl, Shireenjit;  Jubb, Christine A.;  Houghton, Keith A.

Abstract

This study assumes that evidence regarding audit quality can be derived from the level of earnings management reflected in reported abnormal or discretionary accruals. Given this assumption, audit quality is examined in the context of the 1997 Asian financial crisis using data from Malaysia. Examining audit quality in its association with earnings management across differential macroeconomic periods provides insights that may be otherwise masked. The period of the crisis is partitioned between pre-crisis (1994-1996), crisis (1997-1998) and post-crisis (1999). Using a robust approach to the measurement of abnormal accruals, the association of Big 5/non-Big 5 and Industry Specialist/Industry non-specialist auditors with both the levels of, and change in levels of, abnormal accruals is investigated across and within the crisis sub-periods from 1994-1999. Audit quality is found to be associated with abnormal accruals, and differentially so across macroeconomic period with greater constraint evident post-crisis.

Publication type

Conference paper

Source

Proceedings of the 2003 Illinois International Accounting Summer Conference, Goettingen, Germany, 18-20 June 2003

Publication year

2003

Keyword(s)

Asian economic crisis;  Asian financial crisis;  Audit quality;  Auditor industry;  Auditor size;  Auditors;  Earnings management;  Specialisation

Publisher

College of Business at Illinois

Publisher URL

http://business.illinois.edu/accountancy/research/vkzcenter/conferences/gottingen/

Copyright

Copyright © 2003.

Peer reviewed