Analysis of The Role of The Independent Auditor on Reducing Time Lags in Financial Reporting and Earnings Management

Authors

DOI:

https://doi.org/10.30659/jai.12.2.182-190

Abstract

ABSTRACT This study aims to analyze differences in the timeliness of financial reporting and earnings management in terms of auditor quality in manufacturing companies on the Indonesia Stock Exchange. based on the purposive sampling technique, a sample of 37 companies was obtained so that for 3 years of observation the data processed were 111. The hypothesis was tested using the Independent Samples Test different test. The results showed that there was no difference in the level of audit delay between companies audited by big four auditors or not. Meanwhile, the level of corporate earnings management audited by the big four or not the big four shows different results. This shows that the role of independent auditors in reducing earnings management is successful. Keywords: Auditor Quality, Audit Delay and Earnings Management

References

Abdillah, M. R., & Mardijuwono, A. W. (2019). The effect of company characteristics and auditor characteristics to audit report lag. Asian Journal of Accounting Research, 4(1), 129–144. https://doi.org/10.1108/AJAR-05-2019-0042

Alghamdi, M. H., & Salim. (2017). Audit quality and earnings management in less developed economies: the case of Saudi Arabia. Journal of Management & Governance, 21(2).

Alkhatib, K., & Marji, Q. (2008). Audit Delay of Listed Companies. International Business Research, 1, 1342–1349. https://doi.org/10.1016/j.sbspro.2012.09.229

Alves, S. (2013). The impact of audit committee existence and external audit on earnings management. Journal of Financial Reporting and Accounting, 11(2), 143–165. https://doi.org/10.1108/JFRA-04-2012-0018

Alzoubi, E. S. S. (2016). Disclosure quality and earnings management: Evidence from Jordan. Accounting Research Journal, 29(4), 429–456. https://doi.org/10.1108/ARJ-04-2014-0041

Alzoubi, E. S. S. (2018). Audit quality, debt financing, and earnings management: Evidence from Jordan. Journal of International Accounting, Auditing and Taxation, 30, 69–84. https://doi.org/10.1016/j.intaccaudtax.2017.12.001

Asni, N. U. R., Dharmawaty, T., & Irawati, I. (2017). the Influence of Educational Background , Auditor Tenure , and Auditor Professional Proficiency To. International Journal of Management and Applied Science, (2), 124–128.

Chen, H., & Chen, J. Z. G. J. L. (2010). Effects of Audit Quality on Earnings Management and Cost of Equity Capital : Evidence from China *. SSRN Electronic Journal. Retrieved from http://ssrn.com/abstract=1105539

Cheong Pei Ching, Boon Heng Teh, O. T. S. and H. Y. H. (2015). The Relationship among Audit Quality , Earnings Management , and Financial Performance of. International Journal of Economics and Management, 9(1), 211–229. Retrieved from http://www.econ.upm.edu.my/ijem%0AThe

Chi, W., Lisic, L. L., & Pevzner, M. (2011). Is Enhanced Audit Quality Associated with Greater Real Earnings Management? Accounting Horizons, 25(2), 315–335. https://doi.org/10.2308/acch-10025

Gerayli, M. S. ; A. M. Y. A. R. M. (2011). Impact of Audit Quality on Earnings Management: Evidence from Iran Mahdi. International Journal of Basic Sciences & Applied Research, 2(66), 399–404. Retrieved from http://www.isicenter.org

Ishaq, Ahmed Mohammed Ayoib, C.-A. (2016). Effects of Board Size, Board Committees Characteristics and Audit Quality on Audit Report Lags, (2009), 810–818. https://doi.org/10.15405/epsbs.2016.08.114

Jensen, C., & Meckling, H. (1976). Theory of The Firm : Managerial Behavior, Agency Costs and Ownership Structure I . Introduction and summary In this paper WC draw on recent progress in the theory of ( 1 ) property rights , firm . In addition to tying together elements of the theory of e, 3, 305–360.

Jordan, Charles EStanley J. Clark, C. C. H. (2010). The Impact Of Audit Quality On Earnings Management To Achieve User Reference Points In EPS. The Journal of Applied Business Research, 26(1), 19–30.

Karami, G., Karimiyan, T., & Salati, S. (2017). Auditor Tenure , Auditor Industry Expertise , and Audit Report Lag : Evidences of Iran. Iranian Journal of Management Studies (IJMS), 10. https://doi.org/10.22059/ijms.2017.219348.672346

Khalil, M. and, & Ozkan, A. (2016). Board Independence , Audit Quality and Earnings Management : Evidence from Egypt. Journal of Emerging Market Finance, 15(1), 1–35. https://doi.org/10.1177/0972652715623701

Khasharmeh, H. A., & Aljifri, K. (2010). The Timeliness of Annual Reports in Bahrain and United Arab Emirates : An Empirical Compaparative Study. The International Journal of Business and Finance Research, 4(1), 51–71. Retrieved from http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v4n1-2010/IJBFR-V4N1-2010-4.pdf

Lawrence, I., Ph, A., & Elijah, A. (2015). Corporate Attributes and Audit Delay in Emerging Markets : Empirical Evidence from Nigeria. International Journal of Business and Social Research Volume, 05(03), 1–10.

Lestari, S. Y., & Nuryatno, M. (2018). Factors Affecting the Audit Delay and Its Impact on Abnormal Return in Indonesia Stock Exchange. International Journal of Economics and Finance, 10(2), 48–56. https://doi.org/10.5539/ijef.v10n2p48

Muda, I., Maulana, W., Siregar, H. S., & Indra, N. (2018). The Analysis of Effects of Good Corporate Governance on Earnings Management in Indonesia with Panel Data Approach. Iran. Econ. Rev, 22(2), 599–625.

Nawaiseh, M. E. (2016). Can Earnings Management be Influenced by Audit Quality ? International Journal of Finance and Accounting, 5(4), 209–219. https://doi.org/10.5923/j.ijfa.20160504.06

OJK. (2012). PENYAMPAIAN LAPORAN TAHUNAN EMITEN ATAU PERUSAHAAN PUBLIK.

Rusmin, E. R., & John. (2017). Audit quality and audit report lag: Case of Indonesian listed companies. Asian Review of Accounting, 25(2), 1–30.

Soliman, S. Y. M. (2018). The effect of Audit Quality on Earnings Management in Developing Countries: The Case of Egypt. International Research Journal of Applied Finance, IX(4). Retrieved from www.irjaf.com

Downloads

Published

2023-09-29

Issue

Vol. 12 No. 2 (2023): Jurnal Akuntansi Indonesia

Section

Articles

License

Jurnal Akuntansi Indonesia is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License Creative Commons License


License and Copyright Agreement
In submitting the manuscript to the journal, the authors certify that:

  • They are authorized by their co-authors to enter into these arrangements.
  • The work described has not been formally published before, except in the form of an abstract or as part of a published lecture, review, thesis, or overlay journal.
  • That it is not under consideration for publication elsewhere,
  • That its publication has been approved by all the author(s) and by the responsible authorities tacitly or explicitly of the institutes where the work has been carried out.
  • They secure the right to reproduce any material that has already been published or copyrighted elsewhere.
  • They agree to the following license and copyright agreement.

Copyright
Authors who publish with JAI agree to the following terms:

  1. Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License (CC BY-SA 4.0) that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal. 
  2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this journal.
  3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work.