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Audit Quality, Firm Characteristics and Real Earnings Management: The Case of Listed Vietnamese Firms

Author

Listed:
  • Hoang Thi Mai Khanh

    (Faculty of Accounting and Auditing, University of Economics and Law, Viet Nam National University, Ho Chi Minh City, Vietnam,)

  • Nguyen Vinh Khuong

    (Faculty of Accounting and Auditing, University of Economics and Law, Viet Nam National University, Ho Chi Minh City, Vietnam,)

Abstract

This study examines the effect of audit quality and firm characteristics on real earnings management of listed companies in Vietnam. Using the measurement of real earnings management of Roychowdhury (2006), we find that firm size has a negative effect on real earnings management while profitability and firm age have positive effects. Notably, there is no difference between big 4 and non-big 4 in diminishing real earnings management in Vietnam. Our results are based on a large sample of 1,687 firm-year observations on listed companies in Vietnam. We used GMM estimator to test our hypotheses. Our findings make a significant contribution to the literature on the effects of audit quality and firm characteristics on real earnings management, especially in emerging markets.

Suggested Citation

  • Hoang Thi Mai Khanh & Nguyen Vinh Khuong, 2018. "Audit Quality, Firm Characteristics and Real Earnings Management: The Case of Listed Vietnamese Firms," International Journal of Economics and Financial Issues, Econjournals, vol. 8(4), pages 243-249.
    • Handle: RePEc:eco:journ1:2018-04-30
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    References listed on IDEAS

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    Cited by:

    1. Wil Martens & Prem W. S. Yapa & Maryam Safari, 2020. "The Impact of Financial Statement Comparability on Earnings Management: Evidence from Frontier Markets," IJFS, MDPI, vol. 8(4), pages 1-25, November.
    2. Nguyen Thi Hoa Hong & Nguyen Thai Anh & Nguyen Tran Viet Hoang & Do Nhat Minh, 2023. "Corporate governance, external financing, and earnings management: new evidence from an emerging market," Future Business Journal, Springer, vol. 9(1), pages 1-22, December.
    3. Susana Callao & José I. Jarne & David Wróblewski, 2019. "A New Perspective on Earnings Management in Emerging European Countries: Investigation on Environmental Factors that Explain Differences in Earnings Management," Journal of Accounting, Business and Finance Research, Scientific Publishing Institute, vol. 7(2), pages 59-81.
    4. Susmita Dian Indiraswari & Bambang Subroto & Imam Subekti, 2020. "The effect of compensation on accounting fraud with the genders variety of directors as a moderation variable," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 9(2), pages 191-201, March.

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    More about this item

    Keywords

    Real earnings management; emerging markets; audit quality; firm characteristics.;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

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