Relationship between audit quality, corporate governance, and earnings management

2017 Fiscal Year Final Research Report

• Project/Area Number: 15K17160
• Research Category: Grant-in-Aid for Young Scientists (B)
• Allocation Type: Multi-year Fund
• Research Field: Accounting
• Research Institution: Shiga University
• Principal Investigator: Kasai Naoki 滋賀大学, 経済学部, 准教授 (80584143)
• Project Period (FY): 2015-04-01 – 2018-03-31
• Keywords: 監査の品質 / コーポレート・ガバナンス / 利益調整 / 監査報酬 / 外国法人持株比率

Outline of Final Research Achievements

In this study, I empirically investigate the relationship between audit quality, corporate governance, and earnings management. The main findings are as follows: (1) higher foreign institutional ownership leads to lower accrual-based and real earnings management and (2) foreign institutional investors play a vital role in influencing a firm’s auditor choice. This result indicates that foreign institutional investors have stronger incentives to demand high-quality audits to facilitate their monitoring post their investment in overseas firms. I also provide evidence that higher business risk does not have a significant influence on an auditor’s pricing behavior.

Free Research Field

会計学