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Item The Impact of Audit Quality on Earnings Management: Evidence from Listed Companies in Sri Lanka(Department of Accountancy, University of Kelaniya, Sri Lanka., 2023) Madhushani, H. G. I.; Sujeewa, G. M. M.Earnings Management (EM) is related to the manipulation of reported income through accounting practices and decisions. With the occurrence of numerous financial collapses and failures, the reliability of the audit function has been challenged, as auditors play a critical role in expressing an opinion on the financial statements. This study investigates the impact of Audit Quality on EM in Sri Lankan listed companies. This study employs Modified Jones model to examine earnings management practices through Discretionary Accruals (DA). The selected proxies of audit quality which are Length of Audit Tenure, Audit Firm Size and Auditor Independence are the independent variables. The data is collected from annual reports for the financial periods 2015 - 2020 and audit reports for the financial period 2012 - 2020 of listed companies on the Colombo Stock Exchange (CSE). This study employed descriptive statistics, correlation analysis, and multivariate analysis to analyze the data. Based on the quantitative analysis, the results demonstrated that the association between audit firm size and earnings management in Sri Lankan listed companies is negative and significant. It was found that the level of EM between companies using Big 4 auditors and those using non-Big 4 auditors is much lower. This study revealed that auditor independence and EM have a significant negative association. It was suggested that independent auditors have a greater ability to regulate and identify EM activities through company management. Further, this study exposed that there is an insignificant association between the length of audit tenure and earnings management. These findings are useful to shareholders in appointing or reappointing auditors. Furthermore, this study enables stakeholders, including regulatory bodies, to examine the presence of EM practices in listed companies of CSE.Item Analysis of Earnings Management: Using Ownership Structure and Audit Quality Among Banking Industries in Indonesia(Department of Finance, University of Kelaniya., 2023) Susbiyani, A.; Fauzan, D. T.; Aspirandi, R. M.Purpose: This research aims to examine the impact of ownership structure consisting of managerial ownership, institutional ownership and audit quality which is proxied using size of public accountant firms on earnings management using three control variables, namely company size, leverage and market value. Design/Methodology/Approach: The population used in this research is banking companies listed on the Indonesian Stock Exchange for the 2020-2022 period. The data used in this research is secondary data and the sampling technique selection used is purposive sampling. There were 35 companies in the sample with a total of 105 data points at the beginning, after the outlier elimination process the final data amounted to 87 data points. The analytical method used to test the hypothesis in this research uses multiple linear regression analysis. Findings: The results of this research show that managerial ownership and audit quality have a significant negative effect on earnings management, while institutional ownership has a significant positive effect on earnings management. Originality: This study uses a sample of banking companies in Indonesia. Control variables were added by researchers when testing the influence of research variables. Agency theory is used to explain the relationship between managerial ownership, institutional ownership and audit quality with earnings management.