Earnings Management and Audit Quality in Europe: Evidence from the Private Client Segment Market

Brenda Van Tendeloo and Ann Vanstraelen

European Accounting Review, 2008, vol. 17, issue 3, 447-469

Abstract: This paper contributes to the recent literature on financial reporting quality in private (i.e. non-listed) companies (Ball and Shivakumar, 2005; Burgstahler et al., 2006) by examining whether in these types of companies Big 4 audit firms, as high quality auditors, provide a constraint on earnings management. Considering incentives of auditors to supply a high audit quality in private firms, we expect that Big 4 auditors have an incentive to constrain earnings management only in high tax alignment countries, where financial statements are more scrutinized by tax authorities and the probability that an audit failure is detected is higher. Using data on private firms in European countries, this study provides evidence consistent with this expectation.

Date: 2008
References: View complete reference list from CitEc
Citations: View citations in EconPapers (75)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/09638180802016684 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Earnings management and audit quality in Europe: Evidence from the private client segment market (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:euract:v:17:y:2008:i:3:p:447-469

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/REAR20

DOI: 10.1080/09638180802016684

Access Statistics for this article

European Accounting Review is currently edited by Laurence van Lent

More articles in European Accounting Review from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().