Title: Effective audit committee, audit quality and earnings management: evidence from the Ghana Stock Exchange

Authors: Ben K. Agyei-Mensah; Michael Yeboah

Addresses: SolBridge International School of Business, 128 Uam-ro, Dongu, Daejeon, South Korea ' University of Pécs, H-7622 Pécs, Vasvári Pál Utca 4, Hungary; Kumasi Technical University, Box 854, Kumasi, Ghana

Abstract: The purpose of this paper is to investigate the influence of audit committee effectiveness and audit quality (auditor size) on earnings management by firms listed on the Ghana Stock Exchange (GSE). The study uses 180 firm-year observations for the period 2013-2017 for firms listed on the Ghana Stock Exchange. Descriptive analysis was performed to provide the background statistics of the variables examined. This was followed by regression analysis, which forms the main data analysis. The results of multivariate regression analysis indicated that audit committee financial expertise, audit committee prior experience, audit committee size and audit quality have significant negative relationship with discretionary accruals (DACC) as a proxy for earnings management. On the other hand, no significant relationship was found between audit committee independence and audit committee meeting (ACMT) and the level of discretionary accruals. This paper is important because it offers useful information that is of great value to policy makers, academics and other stakeholders. This study is one of the few to measure the influence of audit committee effectiveness and audit quality (auditor size) on earnings management.

Keywords: audit committee effectiveness; audit quality; earnings management; financial reporting quality; Ghana.

DOI: 10.1504/IJMFA.2019.099765

International Journal of Managerial and Financial Accounting, 2019 Vol.11 No.2, pp.93 - 112

Received: 18 Aug 2018
Accepted: 18 Oct 2018
Published online: 21 May 2019 *

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