The Audit Quality And Earnings Management Essay

The Audit Quality And Earnings Management Essay

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In the previous chapter is discussing the audit quality, earnings management and the affiliation between audit quality and earnings management. In this chapter is providing the information regarding on how this research is being carried out in order to meet the objective of this study. This chapter involves of several sections. It will start with the research analysis on sample data variables, the second section is hypothesis development. The third section in this chapter is on the measurement of the variables that adopts in this study and followed by the discussing on the research model. Lastly, an explanation how the sample data variable be analyzed under data analysis procedure section.









3.1 Research Analysis and Sampling

3.1.1 Data analysis

There are two types of data research analysis is available in a way or methods to collect the data, which qualitative data analysis and quantitative data analysis.
Qualitative analysis is primarily exploratory to gain the data for the research and is based on non-statistical data. It is usually be used to expand an understanding of the underlying reasons, opinion and suggestion. Besides that, it helps the researchers to develop ideas or hypotheses for potential quantitative research analysis (Saunder et al. 2003). Qualitative data analysis methods are vary between using unstructured or semi-structured techniques. The example of the methods that commonly be used by researcher like, case study, individual or group interviews and questionnaires (Saunder et al. 2003).
Quantitative analysis is based on statistical data in order to investigate the main research hypothesis (Saunder et al. 2003). Quantitative data analysis is used in measurable data and it is directly derived from the ...


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.... (1999), claim that, higher audit quality is been correlate with the auditors from big firm due to auditor from bigger firm is more expertise in auditing service.
However, Chi et al. (2011), argue that, higher audit quality is positive correlate with greater of earnings management. The reason is, managers are more likely to manipulate the earnings management when their accounting flexibility due to lower quality of auditors. Hence, audit quality is be proxies by audit firm size the following hypothesis is formulated.

H0: Given the institutional environment in Malaysia, there is significantly no association between the auditors from and the occurrence of the level on earnings management.
H1: Given the institutional environment in Malaysia, there is a significantly negative association between auditor firm size and the occurrence of the level on earnings management.

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