The Audit Quality And Earnings Management Essay

The Audit Quality And Earnings Management Essay

Length: 1235 words (3.5 double-spaced pages)

Rating: Strong Essays

Open Document

Essay Preview

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 ...

... middle of paper ...

.... (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.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Questions On The And Financial Statements Essay

- DHB Industries Critique Afua Nyamekye Liberty University DHB Industries Critique 1. Exhibits 1 and 4 present DHB’s original 2003-2004 balance sheets and income statements and the restated balance sheets and income statements for these two-year, respectively. Review the original and restated financial statements for 2004 and identify the “material” differences between them. I agree to the material differences that Brittani pointed out. Materiality depends on a lot of factors....   [tags: Audit, Auditing, Financial audit]

Strong Essays
1216 words (3.5 pages)

Essay on Major Parties Involved Within Corporate Governance

- 2.44 a. Major parties involved in corporate governance: • Stockholders • Board of Directors • Management • Audit Committees of the Board of Directors • Regulators and Standards Setters SEC, AICPA, FASB, PCAOB, IAASB b. Stockholders – in charge of the election of board members, approve major initiatives, and oversight on annual reports on management compensation from the BOD. Board of Directors – Represent the stockholders; ensure organization is run in accordance with the charter and proper accountability....   [tags: Auditing, Audit, Internal control, Internal audit]

Strong Essays
1022 words (2.9 pages)

Management Planning of Arthur Anderson Essay

- In this paper, the writer will evaluate the planning function of management within Arthur Andersen. Specifically, the paper will discuss at least one legal, ethical, and social responsibility issue that impacts Arthur Andersen. Additionally, this paper will analyze the impact these factors have on Arthur Andersen’s management planning. Finally, this paper will analyze at least three factors that influence Arthur Andersen’s strategic, tactical, operational, and contingency planning. The firm of Arthur Andersen LLP was founded in 1913 by Arthur Andersen and Clarence DeLany and named Andersen, DeLany & Co....   [tags: Business Analysis Planning Management]

Strong Essays
1278 words (3.7 pages)

Competitive Swot And Audit Quality Essays

- Competitive Tendering and Audit Quality Auditing is used to enhance the degree of confidence that users of financial statements have in those statements. This is achieved through gathering sufficient evidence to come to a conclusion on whether the financial statements are prepared “in all material respects, in accordance with the applicable financial reporting framework”. (IFAC, 2013). This usually refers to how true and fair the statements are when looking at the financial position of the company at the end of the period....   [tags: Audit, Big Four auditors, Auditing, Quality audit]

Strong Essays
1411 words (4 pages)

The Quality Of Food Quality Audit Essay

- For an industry that can affect human health, it is important to understand and differentiate the terms assurance and control in quality. While quality assurance refers to the process that the food product goes through before it is presented to the customer, quality control is essentially the quality of the food product presented. Control is focused mainly on the adherence of the standards and assurance on the other hand is focused on the process but not specific requirements. While preparing potato crisps for example, quality assurance will explain the pre-set method or type of technology used in preparation and quality control will address the required health and nutritional standards or...   [tags: Management, Quality assurance, Quality control]

Strong Essays
764 words (2.2 pages)

Essay on The Outcome Of A Financial Analysis Model

- Audit quality is often defined as the probability that auditors will detect and report misstatements or unintentional measurement errors in the financial statements (DeAngelo 1981). This stems from an auditor’s competence and independence, in both how they are perceived and in actuality (Watkins et al 2004). This is of vital importance to analysts because financial statements form the basis of forecast inputs. The outcome of a financial analysis model can only be as accurate as the values used to create said model....   [tags: Audit, Big Four auditors, Auditor's report]

Strong Essays
1338 words (3.8 pages)

Essay on Auditing Quality And Audit Quality

- Introduction Auditors play an important role to promote the public interest by providing accurate and independent audit reports about the financial report (Public Company Accounting Oversight Board, 2016). However, scandals like Enron and WorldCorn have cause public doubt and distrust the auditor and audit quality. The public thinks only auditors contribute to the outcome of auditing. However, professions believe auditor not only responsible for audit quality but also many stakeholders affect audit quality....   [tags: Audit, Auditing, Auditor's report]

Strong Essays
1919 words (5.5 pages)

Reasons for New Century's Decrease in Capitaliztion Essay

- To start with, in early this year, New Century was once the second largest subprime mortgage originator in the United States. However, once New York Stock Exchange delisted NCF in March this year, its market capitalization sharply decreased. I noticed NCF had flawed business model and strategies serving its business objectives. Supposedly, the business model of NCF is primary originating; bundling; servicing, and securitizing subprime mortgage loans and sells them to investors. In 2006, NCF claimed to its shareholders and public that the company’s strategic objectives include delivering strong operating performance, expanding more mortgage products and services, increasing market shares by l...   [tags: mortgages, risk, quality]

Strong Essays
1940 words (5.5 pages)

Different Perceptions of Audit Quality Essay

- ... (Public company accounting sighting overview, 2013). Inputs: They are categorized at engagement, firm and national level with the audit firm’s culture (values, ethics and attitudes), the time, knowledge and skill brought to the audit and the effectiveness of the audit’s processes and quality control procedures. Engagement level: The engagement team is independent and exhibits professional competence, due care and skepticism. The engagement team is aware that the audit is performed in public interest and they need to comply with the standards and ethical requirements....   [tags: audit committee, auditor´s opinion]

Strong Essays
810 words (2.3 pages)

Essay on Auditing

- Auditing Auditing has been around since the mid-1800's, which originated in British. Some of firms today have been around since the 1800's, such as Deloitte & Co. Price Waterhouse & Co. In this paper, I will state the functions of auditing, the nature of auditing, how the standards apply to financial, operational, and compliance audits, and some other items that pertain to auditing in general. Nature of Auditing The nature of auditing is that auditors are placed with a special purpose, which is to provide credibility to the information that is reported on the financial statements, along with any other audits that are done by them....   [tags: Accounting Audit]

Free Essays
1104 words (3.2 pages)