Title
The effect of audit quality and degree of international Financial Reporting Standards (IFRS) convergence on the accrual earnings management in ASEAN countries
Abstract
The purpose of this research is to analyze the effect of the degree of convergence of International Financial Reporting Standards (IFRS) and Audit Quality on company’s accrual earnings management. In addition, this research also aims to investigate the moderation role of the degree of convergence of IFRS on the relationship between audit quality and company’s accrual earnings management. This research covers several Association of Southeast Asian Nations (ASEAN) countries, consists of Philippines, Indonesia, Malaysia, Singapore, Thailand, and Vietnam. The methodology used in this research is the multiple regressions by using Least Square method. This study finds that the higher the degree of convergence of IFRS, the lower discretionary accruals, which means the higher quality of earnings. Meanwhile, the size and specialization of the auditor are not significantly effecting accrual earnings management which is described by the value of discretionary accruals. The results imply that being audited by Big-4 or specialized accounting firm, does not guarantee the lower discretionary accruals, which means do not guarantee that the accrual earnings management will be better. On the other hand, the degree of convergence of IFRS did not have a moderating role that influence the effect of audit quality on the accrual earnings management.
Keywords
accrual earnings management, audit quality, ASEAN, convergence, International Financial Reporting Standards (IFRS)
JEL classifications
M40 , M41 , Z23
URI
http://jssidoi.org/jesi/article/357
DOI
Pages
105-120
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Creative Commons Attribution 4.0 International License
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