Anti-Corruption Disclosure and Audit Quality on Earnings Management

DOI

10.2991/aebmr.k.211119.003How to use a DOI?

Keywords

anti-corruption disclosure; audit quality; earnings management

Abstract

This study aims at examining the effects of anti-corruption disclosure and audit quality on earnings management. The Audit quality is proxied by the public accountant firm size and auditor specialization. In the analysis, two controls variable are added, namely return on assets and leverage. The sample of this study includes mining companies that were listed on the Indonesian Stock Exchange (IDX) in 2015-2019. The sample is selected by using the purposive sampling method. The results show that there is a significant negative relationship between anti-corruption disclosure and earnings management, which means as there are more disclosures being made by companies that indicates transparency and integrity activities, the possibilities of earnings management would decrease. However, audit quality does not significantly influence the earnings management because only the auditor specialization has a negative effect on earnings management.

Research purpose:

This study aims at examining the effects of anti-corruption disclosure and audit quality on earnings management.

Research motivation:

This study is important because the negative consequences could occur if company commit corruption as loss of trust from stakeholder could become a concerning problem for the firm in the future. Anti-corruption disclosure not only prevents acts of corruption, but it also provides transparency and accountability by increasing public awareness.

Research design, approach and method:

This research is a quantitative research, using secondary data and utilizing regression analysis to determine the relationship between anti-corruption disclosure, audit quality, and earnings management.

Main findings:

Anti-corruption disclosure has a negative significant relationship with earnings management which means as more disclosures were made by companies, indicating transparency and integrity activities, the possibilities of earnings management could decrease.

Practical/managerial implications:

This study has several implications. Anti-corruption disclosure could prove the firm’s legitimacy for the stakeholder, showing that the company is able to hold its integrity and accountability through its transparency.

Copyright

© 2021 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article under the CC BY-NC license.

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TY  - CONF
AU  - Alhamdi ZUHRI
AU  - Martdian RATNASARI
PY  - 2021
DA  - 2021/12/07
TI  - Anti-Corruption Disclosure and Audit Quality on Earnings Management
BT  - Proceedings of the International Conference on Emerging Challenges: Business Transformation and Circular Economy (ICECH 2021)
PB  - Atlantis Press
SP  - 27
EP  - 34
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.211119.003
DO  - 10.2991/aebmr.k.211119.003
ID  - ZUHRI2021
ER  -