The DOI matches its Crossref record; 14 of the 14 references it cites were found in a registry or an index.
Audit Quality and the Pricing of Discretionary Accruals
Abstract
Accrual-based earnings is considered superior to cash flows. Accruals allow managers to communicate their private and inside information and thereby improve the ability of earnings to reflect underlying economic value. However, managers could engage in aggressive reporting of accruals that would seriously undermine the informativeness of reported earnings. Since outsiders cannot directly observe earnings, high-accrual firms face greater agency costs relative to low-accrual firms. Auditing plays an important role in mitigating these agency costs by constraining opportunistic management of accruals. This study examines whether there is a linkage between audit quality and pricing of discretionary accruals. The findings indicate that the association between stock returns and discretionary accruals is greater for firms audited by Big 6 auditors than for firms audited by non-Big 6 auditors. Further, discretionary accruals of clients of Big 6 auditors have a greater association with future profitability than discretionary accruals of clients of non-Big 6 auditors.
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Cites
Earnings Management During Import Relief Investigations
Jones, J. J. (1991) · Journal of Accounting Research · doi:10.2307/2491047 · Cited by 8,353
Regression Diagnostics: Identifying Influential Data and Sources of Collinearity
Belsley, D. A., Kuh, E., & Welsch, R. E. (1980) · Wiley Series in Probability and Statistics · doi:10.1002/0471725153 · Cited by 7,297
Regression Diagnostics -- Identifying Influential Data and Sources of Collinearity
Beaumont, C. D., Belsley, D. A., Kuh, E., & Welsch, R. E. (1981) · The Journal of the Operational Research Society · doi:10.2307/2581267 · Cited by 6,359
Auditor size and audit quality
DeAngelo, L. E. (1981) · Journal of Accounting and Economics · doi:10.1016/0165-4101(81)90002-1 · Cited by 5,813
The Effect of Audit Quality on Earnings Management*
BECKER, C. L., DEFOND, M. L., JIAMBALVO, J., & SUBRAMANYAM, K. R. (1998) · Contemporary Accounting Research · doi:10.1111/j.1911-3846.1998.tb00547.x · Cited by 3,222
Regression Analysis by Example.
Kmenta, J., Chatterjee, S., & Price, B. (1980) · Journal of the American Statistical Association · doi:10.2307/2287213 · Cited by 3,198
Accounting earnings and cash flows as measures of firm performance
Dechow, P. M. (1994) · Journal of Accounting and Economics · doi:10.1016/0165-4101(94)90016-7 · Cited by 2,582
The pricing of discretionary accruals
Subramanyam, K. R. (1996) · Journal of Accounting and Economics · doi:10.1016/s0165-4101(96)00434-x · Cited by 1,654
Auditor brand name reputations and industry specializations
Craswell, A. T., Francis, J. R., & Taylor, S. L. (1995) · Journal of Accounting and Economics · doi:10.1016/0165-4101(95)00403-3 · Cited by 1,479
The Role of Big 6 Auditors in the Credible Reporting of Accruals
Francis, J. R., Maydew, E. L., & Sparks, H. C. (1999) · AUDITING: A Journal of Practice & Theory · doi:10.2308/aud.1999.18.2.17 · Cited by 1,410
Cited by
A review of archival auditing research
DeFond, M., & Zhang, J. (2014) · Journal of Accounting and Economics · doi:10.1016/j.jacceco.2014.09.002 · Cited by 3,188
Metadata
- Authors
- Krishnan, G. V.
- Venue
- AUDITING: A Journal of Practice & Theory
- Publisher
- American Accounting Association
- Published
- 2003-03-01
- Volume
- 22
- Issue
- 1
- Pages
- 109-126
- ISSN
- 0278-0380 (ISSN-L)
- 1558-7991
- OpenAlex
- W3126086564
- Cited by
- 452
- References
- 14
- FWCI
- 14.92
- Type
- journal article
- Language
- en
- Open access
- closed
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
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