Auditor-Provided Tax Services and Earnings Management in Tax Expense: The Importance of Audit Committees

2012 ◽  
Author(s):  
Ling Lei Lisic
Keyword(s):  
Earnings Management ◽  
Audit Committees ◽  
Tax Expense

CEOs’ accounting-based attributes and earnings management strategies under mandatory IFRS adoption

2018 ◽  
Vol 19 (4) ◽  
pp. 608-625 ◽  
Author(s):  
Amel Kouaib ◽  
Anis Jarboui ◽  
Khaireddine Mouakhar
Keyword(s):  
Earnings Management ◽  
Small Sample Size ◽  
Small Sample ◽  
Moderating Effect ◽  
Audit Committees ◽  
Content Type ◽  
Ifrs Adoption ◽  
Experience Education ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to focus on the moderating effect of mandatory International Financial Reporting Standards (IFRS) adoption on the relationship between chief executive officer (CEO) experience/education and earnings management in European companies. Design/methodology/approach Data from a sample of 302 European firms listed on Stoxx Europe 600 index and 596 CEOs from 2000 to 2014 are used to test the moderation model using moderation regression analysis. Findings Evidence reveals that CEO’s accounting-based attributes are negatively associated with accruals-based earnings management and positively associated with real earnings management (REM). Further, mandatory IFRS adoption significantly moderates the impact of CEO’s accounting-based traits on earnings-management activities. Research limitations/implications A small number of European firms were studied and, given the long study period, many firms with missing data were eliminated. To avoid a small sample size, countries with few observations were included, which leads to an uneven distribution between observations per country. Practical implications Findings from this paper can help: European firms to consider demographic traits when recruiting or promoting executives; the IASB to improve enforcement mechanisms and make IFRS implementation mandatory; and audit committees to effectively monitor REM. Originality/value This study is unique in providing European evidence for the moderating effect of mandatory IFRS adoption on the relationship between CEOs’ accounting experience/education and earnings management activities. This paper is also relevant as it addresses the effectiveness and efficiency of accounting literates.

scholarly journals Pengaruh Dewan Komisaris Independen dan Komite Audit terhadap Manajemen Laba pada Perusahaan Manufaktur yang Terdaftar di Bursa Efek Indonesia Tahun 2015-2017

2019 ◽  
Vol 2 (1) ◽  
pp. 88
Author(s):  
Anton Ferry Ananda ◽  
Santi Andriani
Keyword(s):  
Earnings Management ◽  
Audit Committee ◽  
Quantitative Methods ◽  
Annual Report ◽  
Regression Coefficient ◽  
Stock Exchange ◽  
Secondary Data ◽  
Audit Committees ◽  
Manufacturing Companies ◽  
Partial Regression Coefficient

This study aims to determine the effect of independent commissioners and audit committees on earnings management. This research uses quantitative methods. The data used in this study are secondary data, i.e. data obtained through existing sources and do not need to be collected by the researcher themselves. The data is in the form of an annual report issued by companies listed in the 2015-2017 period which are listed on the Indonesia Stock Exchange. The population in this study are manufacturing companies listed on the Indonesia Stock Exchange in the 2015-2017 period. The results showed that the independent board of commissioners and the audit committee had no simultaneous effect on earnings management. This is consistent with the results of the simultaneous regression coefficient test (Test F) which shows the calculated F value is smaller than the F table, and with a determinant value of 3.1%. Partially the independent board of comissioners and audit committee has no effect on earnings management. Based on the results of the partial regression coefficient test (t test) on the variable independent commissioners and the audit committee showed a significance value greater than 0.05, so it was concluded that the two variables in this study had no effect on earnings management.Keywords: Audit Committee, Independent Board of Commissioners, Profit Management, Finance

scholarly journals An Investigation on the Audit Committees Effectiveness: The Case for GLCs in Malaysia

2011 ◽  
Vol 13 (3) ◽  
pp. 287 ◽  
Author(s):  
Nurul Nazlia Jamil ◽  
Sherliza Puat Nelson
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Audit Committee ◽  
Reporting Quality ◽  
Audit Committees ◽  
Financial Reporting Quality ◽  
Financial Expertise ◽  
Monitoring Mechanism ◽  
The Impact

Financial reporting quality has been under scrutiny especially after the collapse of major companies. The main objective of this study is to investigate the audit committee’s effectiveness on the financial reporting quality among the Malaysian GLCs following the transformation program. In particular, the study examined the impact of audit committee characteristics (independence, size, frequency of meeting and financial expertise) on earnings management in periods prior to and following the transformation program (2003-2009). As of 31 December 2010, there were 33 public-listed companies categorized as Government-Linked Companies (GLC Transformation Policy, 2010) and there were 20 firms that have complete data that resulted in the total number of firm-year observations to 120 for six years (years 2003-2009).  Results show that the magnitude of earnings management as proxy of financial reporting quality is influenced by the audit committee independence. Agency theory was applied to explain audit committee, as a monitoring mechanism as well as reducing agency costs via gaining competitive advantage in knowledge, skills, and expertise towards financial reporting quality. The study is important as it provides additional knowledge about the impact of audit committees effectiveness on reducing the earnings management, and assist practitioners, policymakers and regulators such as Malaysian Institute of Accountants, Securities Commission and government to determine ways to enhance audit committees effectiveness and improve the financial reporting of GLCs, as well as improving the quality of the accounting profession.     

scholarly journals The effect of financial distress and earnings management on tax aggressiveness with corporate governance as the moderating variable

2020 ◽  
Vol 9 (7) ◽  
pp. 167-176
Author(s):  
Ratih Pujirahayu Nugroho ◽  
Sutrisno T Sutrisno ◽  
Endang Mardiati
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Financial Distress ◽  
Stock Exchange ◽  
Real Earnings Management ◽  
Audit Committees ◽  
Manufacturing Companies ◽  
Sample Collection ◽  
Financial Reports ◽  
Tax Aggressiveness

This study aims to verify the correlation between financial distress and earnings management of tax aggressiveness moderated by corporate governance. This study uses a population of manufacturing companies that publish their financial statement on the Indonesia Stock Exchange from 2017 until 2018. Sample collection was performed using a purposive sampling method, resulting in a total of 212 populations that published complete financial reports. This study was tested by using the Multiple Regression Analysis test. This research gave empirical proofs that financial distress and real earnings management positively influenced the tax aggressiveness was supported, the proportion of independent commissioners weakened the financial distress and negatively impacted the tax aggressiveness was supported, the total audit committees weakened the financial distress and negatively influenced the tax aggressiveness was not supported, the proportion of independent commissioners and total audit committees weakened the real earnings management and negatively affected the tax aggressiveness was not supported

scholarly journals PENGARUH CORPORATE GOVERNANCE DAN DEFERRED TAX EXPENSE TERHADAP EARNINGS MANAGEMENT PADA PERUSAHAAN MANUFAKTUR DI INDONESIA

2017 ◽  
Vol 5 (1) ◽  
pp. 25
Author(s):  
Sri Suranta ◽  
Rendi Rendi
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Sampling Method ◽  
Institutional Ownership ◽  
Manufacturing Companies ◽  
Purposive Sampling ◽  
Deferred Tax ◽  
Tax Expense

This study aims to find out the effect of corporate governance and deferred tax expense toward earnings management in Indonesia. Corporate governance represented by board of commissioner, independent commissioner, institutional ownership, and female commissioner. Sample in this study consists of 100 manufacturing companies in 2013 and 2014. Sample is taken using the purposive sampling method. Regression results show that institutional ownership, and deferred tax expense are influencing the earnings management, while the board of commissioner, independent commissioner and female comissioner are not.   Keywords: corporate governance, deferred tax expense, earnings management

The role of audit committees in mitigating earnings management: evidence from Jordan

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Taha Almarayeh ◽  
Modar Abdullatif ◽  
Beatriz Aibar-Guzmán
Keyword(s):  
Developing Countries ◽  
Earnings Management ◽  
Audit Committee ◽  
Discretionary Accruals ◽  
Least Square ◽  
Audit Committees ◽  
Institutional Setting ◽  
Content Type ◽  
The Impact

PurposeThis study examines the relationship between audit committees (ACs) and earnings management (EM) in the developing country context of Jordan. In particular, it investigates whether audit committee attributes, including their size, independence, expertise and meetings, are able to restrict discretionary accruals as a proxy for EM.Design/methodology/approachThe generalized least square (GLS) regression was used to study the association between audit committee attributes and discretionary accruals, as a proxy of EM, for a sample of industrial firms listed on the Amman Stock Exchange (ASE) during the period 2012–2020. Data were obtained from the firms' annual reports.FindingsThe regression results indicate that audit committee independence is the only audit committee attribute that seems to improve the effectiveness of ACs, in that it is significantly associated with less EM, while other audit committee attributes that were tested do not show statistically significant associations.Research limitations/implicationsIn emerging markets, like Jordan, ACs may not be an efficient monitoring mechanism; therefore, it can be argued that the prediction made by the agency theory about the role of ACs in mitigating opportunistic EM activities does not necessarily apply to all contexts.Practical implicationsA better understanding of audit committee effectiveness in developing countries could help regulators in these countries assess the impact of planned corporate governance (CG) reforms and to better monitor and enhance the performance of ACs.Social implicationsIn a setting characterized by closely held companies, high power distance and low demand for high-quality CG mechanisms, this study contributes to understanding how this business system operates, and how improving CG mechanisms could be successful in such cultures.Originality/valueThis study investigates the under-researched relationship between audit committee characteristics and EM in developing countries. In so doing, it aims to provide new insights into this relationship within the developing context case of Jordan, including if and how the institutional setting influences this relationship.

Analisis Pengaruh Beban Pajak Tangguhan, Discretionary Accruals, dan Arus Kas Operasi terhadap Manajemen Laba

2015 ◽  
Vol 2 (01) ◽  
pp. 19-31
Author(s):  
Thomas Junior Sibarani ◽  
Nur Hidayat ◽  
Surtikanti Surtikanti
Keyword(s):  
Earnings Management ◽  
Cash Flow ◽  
Stock Exchange ◽  
Manufacturing Sector ◽  
Flow Analysis ◽  
Discretionary Accruals ◽  
Probability Of Occurrence ◽  
Operating Cash Flow ◽  
Deferred Tax ◽  
Tax Expense

A B S T R A C T The financial statements show the results of management accountability for the use of the resources entrusted to them. This study aims to analyze the probability of occurrence of earnings management. The possibility of earnings management is measured through a variable deferred tax expense, discretionary accruals, and operating cash flow. Analysis was performed on 89 companies listed manufacturing sector in Indonesia Stock Exchange in 2009-2013. Overall the study found empirical evidence that the deferred tax expense, discretionary accruals, and operating cash flow significantly influence the probability of occurrence of earnings management. A B S T R A K Laporan keuangan menunjukkan hasil pertanggungjawaban manajemen atas penggunaan sumber daya yang dipercayakan kepada mereka. Penelitian ini bertujuan untuk menganalisis kemungkinan terjadinya manajemen laba. Kemungkinan manajemen laba diukur melalui variabel beban pajak tangguhan, akrual diskresioner, dan arus kas operasi. Analisis dilakukan pada 89 perusahaan yang terdaftar di sektor manufaktur di Bursa Efek Indonesia pada 2009-2013. Secara keseluruhan penelitian ini menemukan bukti empiris bahwa beban pajak tangguhan, akrual diskresioner, dan arus kas operasi berpengaruh secara signifikan terhadap kemungkinan terjadinya manajemen laba. JEL Classification: G14, G30

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