Auditor independence, auditor specialisation and earnings management: further evidence from Singapore

Rusmin, J-L.W. Mitchell Van Der Zahn, Greg Tower and Alistair M. Brown

International Journal of Accounting, Auditing and Performance Evaluation, 2006, vol. 3, issue 2, 166-193

Abstract: This study uses data from 298 Singapore publicly listed firms to examine the association between earnings management and two audit value attributes: auditor independence and auditor specialisation. We find firms engaging a specialist auditor had significantly lower levels of abnormal accruals than those using non-specialists. This supports the view industry specialisation better enables an auditor to constrain a client's earnings management. Our findings indicate the lack of a universal association between audit value attributes and earnings management. Results imply recent action of Singapore policymakers to strengthen rules governing audit independence as related to non-audit services may have been premature.

Keywords: abnormal accruals; auditor independence; auditor specialisation; Singapore; earnings management; audit value attributes; auditing. (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijaape:v:3:y:2006:i:2:p:166-193

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