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Earnings Management and Audit Quality in Europe: Evidence from the Private Client Segment Market
This paper contributes to the recent literature on financial reporting quality in private (i.e. non-listed) companies (Ball and Shivakumar, 2005 ; Burgstahler et al., 2006 ) by examining whether in these types of companies Big 4 audit firms, as high quality auditors, provide a constraint on earnings...
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| Published in: | The European accounting review 2008-09, Vol.17 (3), p.447-469 |
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| Main Authors: | , |
| Format: | Article |
| Language: | English |
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| cited_by | cdi_FETCH-LOGICAL-c611t-ac2244d0ddf38e562b17ade923d9dc2f2fa307dd4fa46be82a2287b6c083596f3 |
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| cites | cdi_FETCH-LOGICAL-c611t-ac2244d0ddf38e562b17ade923d9dc2f2fa307dd4fa46be82a2287b6c083596f3 |
| container_end_page | 469 |
| container_issue | 3 |
| container_start_page | 447 |
| container_title | The European accounting review |
| container_volume | 17 |
| creator | Van Tendeloo, Brenda Vanstraelen, Ann |
| description | This paper contributes to the recent literature on financial reporting quality in private (i.e. non-listed) companies (Ball and Shivakumar,
2005
; Burgstahler et al.,
2006
) by examining whether in these types of companies Big 4 audit firms, as high quality auditors, provide a constraint on earnings management. Considering incentives of auditors to supply a high audit quality in private firms, we expect that Big 4 auditors have an incentive to constrain earnings management only in high tax alignment countries, where financial statements are more scrutinized by tax authorities and the probability that an audit failure is detected is higher. Using data on private firms in European countries, this study provides evidence consistent with this expectation. |
| doi_str_mv | 10.1080/09638180802016684 |
| format | article |
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2005
; Burgstahler et al.,
2006
) by examining whether in these types of companies Big 4 audit firms, as high quality auditors, provide a constraint on earnings management. Considering incentives of auditors to supply a high audit quality in private firms, we expect that Big 4 auditors have an incentive to constrain earnings management only in high tax alignment countries, where financial statements are more scrutinized by tax authorities and the probability that an audit failure is detected is higher. Using data on private firms in European countries, this study provides evidence consistent with this expectation.</description><identifier>ISSN: 0963-8180</identifier><identifier>EISSN: 1468-4497</identifier><identifier>DOI: 10.1080/09638180802016684</identifier><language>eng</language><publisher>London: Routledge</publisher><subject>Auditing ; Audits ; Big Four accounting firms ; Earnings ; Earnings management ; Europe ; Financial reporting ; Financial services ; Management ; Quality of service ; Studies</subject><ispartof>The European accounting review, 2008-09, Vol.17 (3), p.447-469</ispartof><rights>Copyright European Accounting Association 2008</rights><rights>Copyright Routledge 2008</rights><lds50>peer_reviewed</lds50><oa>free_for_read</oa><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-c611t-ac2244d0ddf38e562b17ade923d9dc2f2fa307dd4fa46be82a2287b6c083596f3</citedby><cites>FETCH-LOGICAL-c611t-ac2244d0ddf38e562b17ade923d9dc2f2fa307dd4fa46be82a2287b6c083596f3</cites></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><link.rule.ids>314,780,784,27924,27925,33223,33224</link.rule.ids><backlink>$$Uhttp://econpapers.repec.org/article/tafeuract/v_3a17_3ay_3a2008_3ai_3a3_3ap_3a447-469.htm$$DView record in RePEc$$Hfree_for_read</backlink></links><search><creatorcontrib>Van Tendeloo, Brenda</creatorcontrib><creatorcontrib>Vanstraelen, Ann</creatorcontrib><title>Earnings Management and Audit Quality in Europe: Evidence from the Private Client Segment Market</title><title>The European accounting review</title><description>This paper contributes to the recent literature on financial reporting quality in private (i.e. non-listed) companies (Ball and Shivakumar,
2005
; Burgstahler et al.,
2006
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2005
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2006
) by examining whether in these types of companies Big 4 audit firms, as high quality auditors, provide a constraint on earnings management. Considering incentives of auditors to supply a high audit quality in private firms, we expect that Big 4 auditors have an incentive to constrain earnings management only in high tax alignment countries, where financial statements are more scrutinized by tax authorities and the probability that an audit failure is detected is higher. Using data on private firms in European countries, this study provides evidence consistent with this expectation.</abstract><cop>London</cop><pub>Routledge</pub><doi>10.1080/09638180802016684</doi><tpages>23</tpages><oa>free_for_read</oa></addata></record> |
| fulltext | fulltext |
| identifier | ISSN: 0963-8180 |
| ispartof | The European accounting review, 2008-09, Vol.17 (3), p.447-469 |
| issn | 0963-8180 1468-4497 |
| language | eng |
| recordid | cdi_informaworld_taylorfrancis_310_1080_09638180802016684 |
| source | EBSCOhost Business Source Ultimate; International Bibliography of the Social Sciences (IBSS); Taylor & Francis |
| subjects | Auditing Audits Big Four accounting firms Earnings Earnings management Europe Financial reporting Financial services Management Quality of service Studies |
| title | Earnings Management and Audit Quality in Europe: Evidence from the Private Client Segment Market |
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