Auditor independence, auditor specialisation and earnings management: further evidence from Singapore
by Rusmin, J-L.W. Mitchell Van Der Zahn, Greg Tower, Alistair M. Brown
International Journal of Accounting, Auditing and Performance Evaluation (IJAAPE), Vol. 3, No. 2, 2006

Abstract: This study uses data from 298 Singapore publicly listed firms to examine the association between earnings management and two audit value attributes: auditor independence and auditor specialisation. We find firms engaging a specialist auditor had significantly lower levels of abnormal accruals than those using non-specialists. This supports the view industry specialisation better enables an auditor to constrain a client's earnings management. Our findings indicate the lack of a universal association between audit value attributes and earnings management. Results imply recent action of Singapore policymakers to strengthen rules governing audit independence as related to non-audit services may have been premature.

Online publication date: Thu, 13-Jul-2006

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