The Effects of Audit Firms’ Industry Specialization and Auditor Tenure on Real Earnings Management

• Main Authors: Yi-Chen Tsai, 蔡宜蓁
• Other Authors: Dr. Hung-Shu Fan
• Format: Others
• Language: zh-TW
• Published: 2014
• Online Access: http://ndltd.ncl.edu.tw/handle/77691146833806820903

碩士 === 輔仁大學 === 會計學系碩士班 === 102 === The study examines the effects of audit firms’ industry specialization and auditor tenure on real earnings management. The sample of this study consists of TWSE /GTSM listed companies from 1983 to 2013. Following Cohen and Zarowin (2008), this study combines abnormal cash flow in operating activities and abnormal discretionary expense into one comprehensive index and then take the absolutely value to measure the extent of firms’ real earnings management. The empirical results of this study show that the extent of real earnings management is significantly negative-related with the audit firms’ industry specialization, auditor tenure variable, and their interaction. This study performs several additional tests, including alternative audit firms’ industry specialization measure test, alternative firms’ real earnings management measure test, and finally, electronic industry subsample and non-electronic industries subsample test. These additional tests gains similar results.