African Journal of Business Management
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Article Number - 9B292AE29173


Vol.5(7), pp. 2686-2699 , April 2011
DOI: 10.5897/AJBM10.1040
ISSN: 1993-8233
 Total Views: 202
 Downloaded: 122




Full Length Research Paper

Study of earnings management and audit quality


Shu-Ling Chiang1 Li-Hua Huang2* and Hsing-Chin Hsiao2




 

1Department of Accounting, Soochow University, Taipei, Taiwan.

2Department of Accounting and Information, National Taipei College of Business, Taipei, Taiwan.


Email: dbacpa@webmail.ntcb.edu.tw






 Accepted: 08 February 2011  Published: 04 April 2011

Copyright © 2011 Author(s) retain the copyright of this article.
This article is published under the terms of the Creative Commons Attribution License 4.0


 

This paper applies the pooled cross-sectional distribution approach to testify whether Small and Medium Enterprises (SMEs) perform earnings management from 1997 to 2003. The study finds that as the SMEs incurred the minor loss, the earnings was manipulated to slight positive earnings for deficit avoidance and failure embarrassment. This leaping zero earnings thresholds of earnings management behavior was not affected by industry characteristics. Regarding the relationship between the earnings management and audit quality, chi-square tests are used. The goal of earnings management crossing the zero earnings thresholds triggered the intention of audit service prepared by the low audit quality Certified Public Accountants (CPAs).

 

Key words: Small business accounting, earnings management, audit quality.


APA (2011). Study of earnings management and audit quality. African Journal of Business Management, 5(7), 2686-2699.
Chicago Shu-Ling Chiang Li-Hua Huang and Hsing-Chin Hsiao. "Study of earnings management and audit quality." African Journal of Business Management 5, no. 7 (2011): 2686-2699.
MLA Shu-Ling Chiang Li-Hua Huang and Hsing-Chin Hsiao. "Study of earnings management and audit quality." African Journal of Business Management 5.7 (2011): 2686-2699.
   
DOI 10.5897/AJBM10.1040
URL http://www.academicjournals.org/journal/AJBM/article-abstract/9B292AE29173

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