Client Importance, Earnings Management, And The Role Of Audit Committees  

Oleh:

Herusetya, Antonius ; Lusmeida, Herlina

Jenis: Article from Proceeding
Dalam koleksi: Proceeding IConEnt 2016 (International Conference on Entrepreneurship) : How Innovation could Improve the Performance and Productivity in Entrepreneurship?, page 51-69.
Topik: client importance; audit committee; earnings management; external auditor.
Fulltext: Antonius Herusetya, Herlina Lusmeida.pdf (591.8KB)

Isi artikel

The aim of this study was to examine on how the association of client importance toward the earnings management behavior for public listed companies on the Indonesia Stock Exchange (IDX), as well as providing empirical evidence on how the role of the effectiveness of the audit committee in moderating the relationship between client importance and earnings management behavior. The study samples were taken from all non-financial companies listed in the Indonesia Stock Exchange in the period 2011-2013. Using 357 firm-years observation and Ordinary Least Square in our test, we found no evidence that the economic interests of the auditors to their clients have negative effect on the earnings management, both total accrual and short-term accrual earnings management. Our studies also found no evidence on the role of the audit committee that can weaken or strengthen on the association between the economic interests of the auditors to their clients and accrual earnings management behavior. These studies have not provided consistent answers regarding the independence of public accounting

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