A study on examining the effect of auditor’s quality and financial regulations on earnings management by utilizing Benford''s law

• Main Authors: Ting-Hui Chiu, 邱定慧
• Other Authors: Feng-Yi Lin
• Format: Others
• Language: zh-TW
• Published: 2012
• Online Access: http://ndltd.ncl.edu.tw/handle/afaajm

碩士 === 國立臺北科技大學 === 經營管理系碩士班 === 100 === Benford’s Law is a digital methodology. It been widely used to detect financial issues in recent 20 years. In this study, we detect enterprises behavior of window dressing, and evaluate recent finance regulation such as U.S. “The Sarbanes-Oxley Act “to prevent financial fraud of enterprises and enhance firms’ internal control. Besides strict regulations imposed for auditors to make auditing opinions. Moreover, we separate listed companies’ auditing opinion by big 4/non-big 4 CPA firms. The results show that audit opinion expressed by non-big 4 CPA firms would occur more earning management than others. This study, with Benford’s law, examines the net income, operating revenue of Taiwan and Shenzhen, China. We certify strict finance regulation and auditing opinion of big 4 CPA firms that restrain listed companies window dressing behavior. The conclusions are: first, stricter finance regulation make companies prevent from window dressing behavior more efficiently and could futher enhance CPA’s auditing ability. Besides Big 4 CPA firms perform better auditing quality especially in first and forth digit financial statements. By utilizing Benford’s law, we conclude that digit analysis can further assist auditors to enhance financial statement accuracy and reduce inventor’s and stakeholder’s risk.