[Home ] [Archive]   [ فارسی ]  
:: Main :: About :: Current Issue :: Archive :: Search :: Submit :: Contact ::
Main Menu
Home::
Journal Information::
Editorial Board ::
Articles archive::
Publication Ethics::
For Authors::
Peer Review Process::
Registration::
Site Facilities::
Contact us::
::
Search in website

Advanced Search
..
Receive site information
Enter your Email in the following box to receive the site news and information.
..
:: Volume 5, Issue 9 (8-2020) ::
aapc 2020, 5(9): 189-224 Back to browse issues page
The Impact of Management Incentives on Earnings Management and Audit Committee Communication with the Auditor on the Quality of Auditor's Judgment
Mohammad Reza Nik Bakht 1, Amir Hossein Hossein Pour2
1- Associate Professor of accounting, Faculty of Management, University of Tehran, Iran(Corresponding author) , mnikbakht@ut.ac.ir
2- Ph.D Student of Accounting,Faculty of Management, University of Tehran, Iran (amhosseinpour@Yahoo.Com)
Abstract:   (4493 Views)
Increasing Emphasis On Internal (Charter Of The Audit Committee) And External (Public Company Accounting Oversight Board Standards) Laws And Regulations Regarding The Audit Committee Communication With The Independent Auditor, In Order To Improve The Independent Auditor Performance And The Quality Of Financial Reporting, This Study Examined The Effect Of Management Incentives On Earnings Management And The Audit Committee Communication With The Independent Auditor On The Quality Of Auditor's Judgment. It Should Be Noted That, The Research Method Is Experimental, Which Is Conducted Through A 2*2 Between-Subjects Experiment, With Experimental Design Post Test With Control Group, Consisting Of The Variables "Management Incentives On Earnings Management" And "Audit Committee Communication With The Independent Auditor". Participants In The Test Are Managers Of Audit Firms And This Research Were Conducted In Year 2019. Statistical Test Method Is Also MANCOVA.
The Results Of The Analysis On The Data Extracted From 64 Managers Of Audit Firms, Indicate That "Management Incentives On Earnings Management" And "Audit Committee Communication With The Independent Auditor" Has A Positive And Significant Effect On The Quality Of Auditor's Judgment And Also The Interaction Of "Management Incentives On Earnings Management And Audit Committee Communication With The Independent Auditor" Has A Positive And Significant Effect On The Quality Of Auditor's Judgment. Finally, It Was Concluded From The Results Of The Study That According To Source Credibility Theory, When There Are High Management Incentives On Earnings Management, Audit Committee Communication With The Independent Auditor Has A Positive And Significant Effect On The Quality Of Auditor's Judgment.
Keywords: Management Incentives on Earnings Management, Audit Committee, the Quality of the Auditor's Judgment, Competing Preferences, Information Source Credibility.
Full-Text [PDF 316 kb]   (842 Downloads)    
Type of Study: Applicable | Subject: Special
Received: 2019/11/3 | Accepted: 2020/01/3 | Published: 2020/08/22
References
1. Agyei- Mensah, B., and M. Yeboah. 2019. Effective Audit Committee, Audit Quality And Earnings Management: Evidence From The Ghana Stock Exchange. International Journal Of Managerial And Financial Accounting 11 (2): 93-112.
2. Agyei-Mensah, B. 2018. The Effect Of Audit Committee Effectiveness And Audit Quality On Corporate Voluntary Disclosure Quality. African Journal Of Economic And Management Studies. Https://Doi.Org/10.1108/AJEMS-04-2018-0102.
3. Bagley, P. L. 2010. Negative Affect: A Consequence Of Multiple accountabilities in auditing. Auditing: A Journal of Practice & Theory. 29 (2): 141–157.
4. Bamber, E. M., and V. M. Iyer. 2007. Auditors’ identification with their clients and its effect on auditors’ objectivity. Auditing: A Journal of Practice & Theory. 26 (2): 1–24.
5. Beatty, R. P. 1989. Auditor Reputation and the Pricing Of Initial Public Offerings. The Accounting Review. 64 (4): 693-709.
6. Beaulieu, P. R. 2001. The effects of judgments of new clients’ integrity upon risk judgments, audit evidence, and fees. Auditing: A Journal of Practice & Theory. 20 (2): 85–99.
7. Behn, B., J.H. Choi, T. Kang. 2008. Audit quality and properties of analyst earnings forecasts. The Accounting Review. 83 (2): 327–359.
8. Bierstaker, J. L., and A. Wright. 2001. The effects of fee pressure and partner pressure on audit planning decisions. Advances in Accounting. 18: 25–46.
9. Birnbaum, M. H., and S. E. Stegner. 1979. Source credibility in social judgment: Bias, expertise, and the judge’s point of view. Journal of Personality and Social Psychology. 37 (1): 48–74.
10. Bonner S.E. 1990. Experience Effects In Auditing: The Role Of Task-Specific Knowledge. The Accounting Review. 66: 72-92.
11. Bonner. S., 2007. judgment and decision making in accounting. university of southern California.
12. Brown, j. o., v.k. popova, 2016. the interplay of management incentives and audit committee communication on auditor judgment. behavioral research in accounting. 28 (1): 27-40.
13. Carcello, J. V., D. R. Hermanson, Z. X. Ye. 2011. Corporate Governance Research In Accounting And Auditing: Insights, Practice Implications, And Future Research Directions. Auditing: A Journal Of Practice & Theory. 30 (3): 1–31.
14. Cohen, J., G. Krishnamoorthy, A. M. Wright. 2002. Corporate Governance And The Audit Process. Contemporary Accounting Research. 19 (4): 573–594.
15. Cohen, J., G. Krishnamoorthy. A. M. Wright. 2004. The corporate governance mosaic and financial reporting quality. Journal of Accounting Literature. 23 (1): 87–152.
16. Davidson, R. A. and D. Neu. 1993. A Rote on Association Between Audit Firm Size and Audit Quality. Contemporary Accounting Research. 9 (2): 479-488 .
17. DeAngelo, L., 1981. Auditor size and audit quality. Journal of Accounting and Economics. 3 (3): 183-199
18. DeZoort, F. T., D. R. Hermanson, R. W. Houston. 2008. Audit committee member support for proposed audit adjustments: Pre-SOX versus post-SOX judgments. Auditing: A Journal of Practice & Theory 27 (1): 85–104.
19. Francis, J., & J. Krishnan. 1999. Accounting accruals and auditor reporting conservatism. Contemporary Accounting Research. 16 (1): 135-165.
20. Gibbins, M., and J. D. Newton. 1994. An empirical exploration of complex accountability in public accounting. Journal of Accounting Research. 32 (2): 165–186.
21. Gibbins., M. 1984. Proposition About The Psychology Of Professional Judgment In Public Accounting. Journal Of Accounting Research. 22 (1): 103-125.
22. Gramling., A. A. 1999. External auditors’ reliance on work performed by internal auditors: The influence of fee pressure on this reliance decision. Auditing: A Journal of Practice & Theory. 18: 117–146.
23. Herdman., R. K. 2002. Making audit committees more effective. Speech by SEC staff. Tulane Corporate Law Institute. New Orleans March Available at: http://www.sec.gov/news/speech/spch543.htm.
24. Kizirian., T., B. Mayhew, L. Sneathen, Jr. 2005. The impact of management integrity on audit planning and evidence. Auditing: A Journal of Practice & Theory. 24) 2(: 49–67.
25. O’Keefe., D. J. 2002. Persuasion: Theory and Research. Thousand Oaks. CA: Sage Publications.
26. Pomeroy., B. 2010. Audit committee member investigation of significant accounting decisions. Auditing: A Journal of Practice & Theory. 29 (1): 173–205.
27. Pornpitakpan., C. 2004. The persuasiveness of source credibility: A critical review of five decades’ evidence. Journal of Applied Social Psychology. 34 (2): 243–281.
28. Public Company Accounting Oversight Board (PCAOB). 2012. Communications with Audit Committees. Auditing Standard No. 16. Washington, DC: PCAOB.
29. Robertson, J. C. 2010. The effects of ingratiation and client incentive on auditor judgment. Behavioral Research in Accounting. 22 (2): 69–86.
30. Stefaniak., C. M., R. W. Houston, R. M. Cornell. 2012. The effects of employer and client identification on internal and external auditors’ evaluations of internal control deficiencies. Auditing: A Journal of Practice & Theory. 31 (1): 39–56.
31. Tajfel, H. 1974. Social identity and intergroup behavior. Social Science Information. 13(2): 65-93.
32. Wanda, A.Wallace. 1980. The Economic Role Of The Audit In Free And Regulated Markets. Graduate School Of Mangement. University Of Rochestor, NY.
Add your comments about this article
Your username or Email:

CAPTCHA



XML   Persian Abstract   Print


Download citation:
BibTeX | RIS | EndNote | Medlars | ProCite | Reference Manager | RefWorks
Send citation to:

Nik Bakht M R, Hossein Pour A H. The Impact of Management Incentives on Earnings Management and Audit Committee Communication with the Auditor on the Quality of Auditor's Judgment. aapc 2020; 5 (9) :189-224
URL: http://aapc.khu.ac.ir/article-1-740-en.html


Rights and permissions
Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Volume 5, Issue 9 (8-2020) Back to browse issues page
دوفصلنامه علمی حسابداری ارزشی و رفتاری journal of Value & Behavioral  Accounting
Persian site map - English site map - Created in 0.08 seconds with 37 queries by YEKTAWEB 4666