Bamahros, Hasan Mohammed and Wan Hussin, Wan Nordin (2015) Non-audit services, audit firm tenure and earnings management in Malaysia. Asian Academy of Management Journal of Accounting and Finance, 11 (1). pp. 145-168. ISSN 1823-4992

PDF Restricted to Registered users only Download (1MB) | Request a copy

Abstract

The main objective of this study is to investigate the association of auditor-provided non audit services and audit firm tenure with earnings management in Malaysian public listed firms.Two measurements, namely, discretionary current accruals based on the performance-adjusted model developed by Ashbaugh, LaFond and Mayhew (2003) and discretionary total accruals based on the modified Jones model (1991), are employed to estimate the level of earnings management.Our sample consists of 525 companies for financial year 2009.The results suggest that longer audit firm tenure reduces earnings management.However, the magnitude of non-audit fees exacerbates earnings management.Based on the empirical evidence, any attempt to legislate audit firm rotation in Malaysia is unwarranted. Further research is required to move toward a policy resolution on the restriction of non-audit services in Malaysia.

Item Type:	Article
Uncontrolled Keywords:	earnings management, non-audit fees, audit firm tenure, auditor rotation,Malaysia
Subjects:	H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Divisions:	Tunku Puteri Intan Safinaz School of Accountancy (TISSA)
Depositing User:	Dr. Hasan Mohammed Ahmed Bamahros
Date Deposited:	04 Nov 2015 01:37
Last Modified:	12 Apr 2016 08:02
URI:	https://repo.uum.edu.my/id/eprint/16061

Actions (login required)

View Item