USF St. Petersburg campus Faculty Publications
An empirical analysis of the effect of audit quality on financial reporting fraud.
Document Type
Article
Publication Date
2012
ISSN
1727-9232
Abstract
Several highly publicized financial reporting fraud cases (e.g., Enron, Tyco International, and WorldCom) have put the role of external auditors and quality of their audit in ensuring corporate financial reporting quality under considerable scrutiny. Much research has been conducted on the determinants of earnings management. Since earnings management is inherently unobservable, most studies use various measures of accruals as proxies for earnings management. This study examines the relationship between audit quality and a more direct measure of earnings management – financial reporting fraud. Contrary to the concerns that nonaudit services are the primary reason for auditor independence impairment that results in lower audit and earnings quality, this study finds no significant relationship between reporting fraud and fees paid to auditors for various services.
Publisher
Virtus Interpress
Recommended Citation
Hsiao, F. D., Lin, W. & Yang, J. S. (2012). An empirical analysis of the effect of audit quality on financial reporting fraud. Corporate Ownership and Control, 9(4), 391-399. doi: 10.22495/cocv9i4c4art2
Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.
