Audit firm attributes and income smoothing: the moderating influence of audit committee accounting expertise

References

• Adeniyi, S. I., Mieseigha, E. G., & MIESEIGHA, E. G. (2013). Audit tenure: An assessment of its effects on audit quality in Nigeria. International Journal of Academic Research in Accounting, Finance and Management Sciences, 3(3), 275–17. https://doi.org/10.6007/IJARAFMS/v3-i3/168
   Google Scholar
• Adi, S. (2000). Auditor quality and the presence of audit committees: An association with income smoothing. [ Master’s thesis, University of Tasmania].
   Google Scholar
• Aflatooni, A., & Nikbakht, Z. (2009). Income smoothing, real earnings management and long-run stock returns. Business Intelligence Journal, 3(1), 55–73.
   Google Scholar
• Agrawal, A., & Chadha, S. (2005). Corporate governance and accounting scandals. Journal of Law and Economics, 48(2), 371–406. https://doi.org/10.1086/430808
   Web of Science ®Google Scholar
• Al-Dhamari, R. A., Al-Gamrh, B., Ismail, K. N. I. K., & Ismail, S. S. H. (2018). Related party transactions and audit fees: The role of the internal audit function. Journal of Management and Governance, 22(1), 187–212. https://doi.org/10.1007/s10997-017-9376-6
   Web of Science ®Google Scholar
• Almarayeh, T. S., Aibar-Guzmán, B., & Abdullatif, M. (2020). Does audit quality influence earnings management in emerging markets? Evidence from Jordan. Revista de Contabilidad Spanish Accounting Review, 23(1), 64–74. https://doi.org/10.6018/rcsar.365091
   Web of Science ®Google Scholar
• Alzoubi, E. S. S. (2016). Audit quality and earnings management: Evidence from Jordan. Journal of Applied Accounting Research, 17(2), 170–189. https://doi.org/10.1108/JAAR-09-2014-0089
   Web of Science ®Google Scholar
• Amat, O., & Gowthorpe, C. (2004). Creative Accounting: Nature, Incidence and Ethical Issues. https://econ-papers.upf.edu/papers/749.pdf
   Google Scholar
• Ashari, N., Koh, H. C., Tan, S. L., & Wong, W. H. (1994). Factors Affecting income smoothing among listed companies in Singapore. Accounting and Business Research, 24(96), 291–301. https://doi.org/10.1080/00014788.1994.9729488
   Google Scholar
• Asthana, S., Khurana, I., & Raman, K. K. (2019). Fee competition among Big 4 auditors and audit quality Review of Quantitative Finance and Accounting. 52(2), 403–438. https://doi.org/10.1007/_11156-018-0714-9
   Google Scholar
• Badolato, P., Donelson, D. C., & Ege, M. (2014). Audit committee financial expertise and earnings management. Journal of Accounting and Economics, 58(2–3), 208–230. https://doi.org/10.1016/j.jacceco.2014.08.006
   Web of Science ®Google Scholar
• Bala, H., Amran, N. A., & Shaari, H. (2018a). Auditor brand name and financial reporting fraud of listed companies in Nigeria. Journal of Advanced Research in Business and Management Studies, 11(1), 84–94. https://www.akademiabaru.com/submit/index.php/arbms/article/view/1294
   Google Scholar
• Bala, H., Amran, N. A., & Shaari, H. (2019). Audit committee attributes and cosmetic accounting in Nigeria: The moderating effect of audit price. Managerial Auditing Journal, 35(2), 177–206. https://doi.org/10.1108/MAJ-06-2018-1897
   Web of Science ®Google Scholar
• Bala, H., Amran, N., & Sharri, H. (2018). Audit fees and financial reporting quality: A study of listed companies in Nigeria. International Review of Management and Business Research, 7(2), 482–489. https://doi.org/10.30543/7-2(2018)-17
   Google Scholar
• Ball, F., Tyler, J., & Wells, P. (2015). Is audit quality impacted by auditor relationships? Journal of Contemporary Accounting and Economics, 11(2), 166–181. https://doi.org/10.1016/j.jcae.2015.05.002
   Google Scholar
• Baron, R. M., & Kenny, D. A. (1986). The moderator-mediator variable distinction in social, moderator-mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51(6), 1173–1182. https://doi.org/10.1037/0022–3514.51.6.1173
   PubMed Web of Science ®Google Scholar
• Breton, G., & Taffler, R. J. (1995). Creative accounting and investment analyst response. Accounting and Business Research, 25(98), 81–92. https://doi.org/10.1080/00014788.1995.9729931
   Google Scholar
• Bruynseels, L., & Cardinaels, E. (2014). Audit committee: Management watchdog or friend of the CEO? The Accounting Review, 89(1), 113–145. https://doi.org/10.2308/accr-50601
   Web of Science ®Google Scholar
• Buntara, A. A., & Adhariani, D. (2019). Audit tenure and audit quality: The renewal sense of comfort. Australasian Accounting, Business and Finance Journal, 13(4), 46–62. https://doi.org/10.14453/aabfj.v13i4.4
   Web of Science ®Google Scholar
• Carey, P., & Simnett, R. (2006). Audit partner tenure and audit quality.Accounting Review. 81(3), 653–676. https://www.jstor.org/stable/4093109
   Google Scholar
• Chang, H., Ho, L. J., Liu, Z., & Ouyang, B. (2021). Income smoothing and audit fees. Advances in Accounting, 54(3), 100547. https://doi.org/10.1016/j.adiac.2021.100547
   Google Scholar
• Chen, K. Y., Wu, S.-Y., & Zhou, J. (2006). Auditor brand name, industry specialisation, and earnings management : Evidence from Taiwanese companies. International Journal of Accounting, Auditing and Performance Evaluation, 3(2), 194–219. https://doi.org/10.1504/IJAAPE.2006.010301
   Google Scholar
• Cho, M., Kwon, S. Y., & Krishnan, G. V. (2021). Audit fee lowballing: Determinants, recovery, and future audit quality. Journal of Accounting and Public Policy, 40(4), 106787. https://doi.org/10.1016/j.jaccpubpol.2020.106787
   Web of Science ®Google Scholar
• Cohen, J., Gaynor, L. M., Krishnamoorthy, G., & Wright, A. M. (2007). Auditor communications with the audit committee and the board of directors : Opportunities for Future research. Accounting Horizons, 21(2), 165–187. https://doi.org/10.2308/acch.2007.21.2.165
   Google Scholar
• Dechow, P., Ge, W., & Schrand, C. (2010). Understanding earnings quality: A review of the proxies, their determinants and their consequences. Journal of Accounting and Economics, 50(2–3), 344–401. https://doi.org/10.1016/j.jacceco.2010.09.001
   Web of Science ®Google Scholar
• DeFond, M. L. (1992). The association between changes in client firm agency costs and auditor switching. Auditing: A Journal of Practice & Theory, 11(1), 16–31. https://doi.org/10.4236/jssm.2020.132025
   Web of Science ®Google Scholar
• DeFond, M. L., & Park, C. W. (1997). Smoothing income in anticipation of future earnings. Journal of Accounting and Economics, 23(2), 115–139. https://doi.org/10.1016/S0165-4101(97)00004-9
   Web of Science ®Google Scholar
• DeFond, M., & Zhang, J. (2014). A review of archival auditing research. Journal of Accounting and Economics, 58(2–3), 275–326. https://doi.org/10.1016/j.jacceco.2014.09.002
   Web of Science ®Google Scholar
• Dhaliwal, D., Naiker, V., & Navissi, F. (2010). The association between accrual quality and the characteristics of accounting experts and the mix of expertise on audit committees. Contemporary Accounting Research, 27(3), 787–827. https://doi.org/10.1111/j.1911-3846.2010.01027.x
   Web of Science ®Google Scholar
• Dickey, D. A., & Fuller, W. A. (1988). Likelihood ratio statistics for autoregressive time series with a unit root. Econometrica: Journal of the Econometric Society, 49(4), 1057–1072. https://EconPapers.repec.org/RePEc:ecm:emetrp:v:49:y:1981:i:4:p:1057-72
   Google Scholar
• Eckel, M. (1981). Smoothing Hypothesis Revisited. Abacus, 17(1), 28–40. https://doi.org/10.1111/j.1467-6281.1981.tb00099.x
   Google Scholar
• Eriabie, S., & Dabor, E. L. (2017). Corporate governance and audit quality in Nigeria: Evidence from the banking industry. Journal of Accounting, Finance and Auditing Studies, 3(1), 1–16. https://doi.org/10.4236/ajibm.2020.102016
   Google Scholar
• Faraji, O., Fathi, M. R., Motahari Kia, S., Younesi Motie, F., & Masoudi Alavi, S. H. (2021). Institutional ownership, business cycles and earnings informativeness of income smoothing: Evidence from Iran. Advances in Mathematical Finance and Applications, 6(2), 303–319. https://doi.org/10.22034/AMFA.2020.1892989.1374
   Google Scholar
• Franke, R. M., Johnson, M. F., & Nelson, K. K. (2002). The relation between auditors ’ services and nonaudit earnings management. The Accounting Review, 7(Supplement), 71–105. https://doi.org/10.2308/accr.2002.77.s-1.71
   Google Scholar
• Gaynor, L. M., Kelton, A. S., Mercer, M., & Yohn, T. L. (2016). Understanding the relation between financial reporting quality and audit quality. Auditing: A Journal of Practice and Theory, 35(4), 1–22. https://doi.org/10.2308/ajpt-51453
   Web of Science ®Google Scholar
• Gujarati, D. N. (2004). Basic econometrics. Economic series McGraw-Hill International editions.
   Google Scholar
• Habib, A. (2005). Firm-Specific determinants of income smoothing in Bangladesh: An empirical evaluation. Advances in International Accounting, 18, 53–71. https://doi.org/10.1016/S0897-3660(05)18003-9
   Google Scholar
• Hillman, A. J., Cannella, A. A., & Paetzold, R. L. (2000). The resource dependence role of corporate directors: Strategic adaptation of board composition in response to environmental change. Journal of Management, 37(2), 235–256. https://doi.org/10.1111/1467-6486.00179
   Web of Science ®Google Scholar
• Huang, P., Zhang, Y., Deis, D. R., & Moffitt, J. S. (2009). Do artificial income smoothing and real income smoothing contribute to firm value equivalently? Journal of Banking and Finance, 33(2), 223–233. https://doi.org/10.1016/j.jbankfin.2008.07.012
   Web of Science ®Google Scholar
• Ishak, R., Amran, N. A., & Manaf, K. B. A. (2017). Leadership structure, gender diversity, and audit quality influence on earnings management in Malaysian listed companies. International Review of Management and Marketing, 6(8S), 342–345. https://econjournals.com/index.php/irmm/article/view/5688
   Google Scholar
• Ismail, W. A. W., Kamarudin, K. A., & Yasin, S. (2018). Deceptive versus informative income smoothing : Evidence from audit committee attributes. International Journal of Scientific and Research Publications, 8(8), 324–329. http://dx.doi.org/10.29322/IJSRP.8.8.2018.p8038
   Google Scholar
• Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/10.1016/0304-405X(76)90026-X
   Web of Science ®Google Scholar
• Jiang, J. X., Wang, I. Y., & Wang, K. P. (2018). Big N auditors and audit quality: New evidence from quasi-experiments. Accounting Review, 94(1), 205–227. https://doi.org/10.2308/accr-52106
   Web of Science ®Google Scholar
• Knechel, W. R., Mintchik, N., Pevzner, M., & Velury, U. (2018). The effects of generalised trust and civic cooperation on big N presence and audit fees across the globe. Auditing A Journal of Practice and Theory, 28(1), 193–219. https://doi.org/10.2308/ajpt-52014
   Google Scholar
• Kuang, H., Li, H., Sherwood, M. G., & Whited, R. L. (2020). Mandatory audit partner rotations and audit quality in the United States. Auditing: A Journal of Practice & Theory, 39(3), 161–184. https://doi.org/10.2308/ajpt-18-152
   Web of Science ®Google Scholar
• Le, H. T. (2021). The impact of auditor size and auditor tenure on banks’ income smoothing in developing countries: Evidence from Vietnam. In N. N. Thach, K. Kreinovich, & N. D. Trung (Eds.), Data science for financial econometrics. Studies in computational intelligence (Vol. 898, pp. 513–529). Springer Nature.
   Google Scholar
• Leong, K. S., Wang, J., Suwardy, T., & Kusnadi, Y. (2015). Audit committees and financial reporting quality in Singapore audit committees and financial reporting quality in Singapore. Journal of Business Ethics, 3(2), 28–30.
   Google Scholar
• Leung, S. C. M., Srinidhi, B., & Xie, L. (2017March). Auditor tenure, information asymmetry and earnings quality auditor tenure, information asymmetry and earnings quality. https://ssrn.com/abstract=2941949 or http://dx.doi.org/10.2139/ssrn.2941949
   Google Scholar
• Louis, H. (2005). Acquirers ’ abnormal returns and the non-Big 4 auditor clientele effect. Journal of Accounting and Economics, 40(1–3), 75–99. https://doi.org/10.1016/j.jacceco.2005.03.001
   Web of Science ®Google Scholar
• Mbir, D. E. G., Agyemang, O. S., Tackie, G., Abeka, M. J., & Ntim, C. G. (2020). IFRS compliance, corporate governance, and financial reporting quality of GSE-listed nonfinancial firms. Cogent Business & Management, 7(1), 1759856. https://doi.org/10.1080/23311975.2020.1759856
   Web of Science ®Google Scholar
• Mitra, S., Deis, D. R., & Hossain, M. (2009). The association between audit fees and reported earnings quality in pre- and post- Sarbanes-Oxley regimes. Review of Accounting and Finance, 8(3), 232–252. https://doi.org/10.1108/14757700910980840
   Google Scholar
• Myers, J. N., Myers, L. A., & Omer, T. C. (2003). Exploring the terms of the auditor-client relationship and the quality of earnings: A case for mandatory auditor rotation? Accounting Review, 8(3), 779–799. https://doi.org/10.2308/accr.2003.78.3.779
   Google Scholar
• Ndubuisi, A. N., & Ezechukwu, B. O. (2017). Determinants of audit quality: Evidence from deposit money banks listed on Nigeria stock exchange. International Journal of Academic Research in Accounting, Finance and Management Sciences, 7(2), 117–130. https://doi.org/10.6007/IJARAFMS/v7-i2/2877
   Google Scholar
• Okolie, A. O. (2014). Auditor tenure, auditor Independence, and accrual-based earnings management of quoted companies in Nigeria. European Journal of Accounting, Auditing and Finance Research, 2(2), 63–90.
   Google Scholar
• Özcan, A. (2019). Audit quality and earnings management: Evidence from Turkey. International Journal of Engineering and Applied Sciences, 6(8), 67–78.
   Google Scholar
• Ozili, K. (2017). Bank earnings smoothing, audit quality and procyclicality in Africa: The case of loan loss provisions. Review of Accounting and Finance, 16(2), 142–161. https://doi.org/10.1108/RAF-12-2015-0188
   Web of Science ®Google Scholar
• Pfeffer, J. (1972). Size and composition of corporate boards of directors: The organization and its environment. Administrative Science Quarterly, 218–228. https://doi.org/10.2307/2393956
   Web of Science ®Google Scholar
• Richardson, S. A., Sloan, R. G., Soliman, M. T., & Tuna, I. (2005). Accrual reliability, earnings persistence and stock prices. Journal of Accounting and Economics, 39(3), 437–485. https://doi.org/10.1016/j.jacceco.2005.04.005
   Web of Science ®Google Scholar
• Sani, A., Latif, R. A., & Al-dhamari, R. A. (2020). CEO discretion, political connection and real earnings management in Nigeria. Management Research Review, 43(8), 909–921. https://doi.org/10.1108/MRR-12-2018-0460
   Web of Science ®Google Scholar
• Shubita, M. F. (2015). The impact of income smoothing on earnings quality in emerging markets: Evidence from GCC markets. Journal of Accounting in Emerging Economies, 5(3), 299–324. https://doi.org/10.1108/JAEE-04-2011-0011
   Web of Science ®Google Scholar
• Tabachnick, B. G., Fidell, L. S., & Ullman, J. B. (2007). Using multivariate statistics. Pearson.
   Google Scholar
• Tarmidi, D., Murwaningsari, E., & Ahnan, Z. M. (2021). Earnings quality and audit quality: Analysis of investor reaction. Humanities and Social Sciences Letters, 9(3), 250–259. https://doi.org/10.18488/journal.73.2021.93.250.259
   Google Scholar
• Trautman, L. J. (2013). Who qualifies as an audit committee financial accounting expert under SEC regulations and NYSE rules? Depaul Business & Commercial Law Journal, 11(2), 206–235.
   Google Scholar
• Vasilakopoulos, K., Tzovas, C., & Ballas, A. (2021). Banks’ risk and the impact of audit quality on income smoothing. Accounting and Management Information Systems, 20(3), 425–453. https://doi.org/10.24818/jamis.2021.03003
   Google Scholar
• Waheed, A., Hussain, S., Hanif, H., Mahmood, H., Malik, Q. A., & Ntim, C. G. (2021). Corporate social responsibility and firm performance: The moderation of investment horizon and corporate governance. Cogent Business & Management, 8(1), 1938349. https://doi.org/10.1080/23311975.2021.1938349
   Web of Science ®Google Scholar
• Wan Hussin, W. N., Bamahros, H. M., & Shukeri, S. N. (2018). Lead engagement, partner workload, partner-client tenure, and audit reporting lag: Evidence from Malaysia. Managerial Auditing Journal, 33(3), 246–266. https://doi.org/10.1108/MAJ-07-2017-1601
   Web of Science ®Google Scholar
• Watts, R. L., & Zimmerman, J. L. (1983). Agency problems, auditing, and the theory of the firm: Some evidence. The Journal of Law & Economics, 26(3), 613–633. https://doi.org/10.1086/467051
   Web of Science ®Google Scholar
• Widyaningsih, I. A., Harymawan, I., Mardijuwono, A. W., Ayuningtyas, E. S., Larasati, D. A., & Ntim, C. G. (2019). Audit firm rotation and audit quality: Comparison before vs after the elimination of audit firm rotation regulations in Indonesia. Cogent Business & Management, 6(1), 1–15. https://doi.org/10.1080/23311975.2019.1695403
   Web of Science ®Google Scholar
• Wu, A. D., & Zumbo, B. D. (2008). Understanding and using mediators and moderators. Social Indicators Research, 87(3), 367–392. https://doi.org/10.1007/s11205-007-9143-1
   Web of Science ®Google Scholar
• Zandi, G., Sadiq, M., & Mohamad, S. (2019). Big-Four auditors and financial reporting quality: Evidence from Pakistan. Humanities and Social Sciences Reviews, 7(2), 369–375. https://doi.org/10.18510/hssr.2019.7243
   Google Scholar