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Auditor awareness of earnings management


Author Info

  • Evangelos Koumanakos
  • Antonios Georgopoulos
  • Costas Siriopoulos
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    This study examines whether auditor reporting in Greece is associated with different levels of discretionary accruals – a common proxy for earnings management. We focus our research on 91 cases of quoted companies on the Athens Stock Exchange (ASE). These are listed companies that were asked in year 2003 by the Athens Stock Exchange Board to quantify the effects of the qualifications made by their external auditors and post them in the ASE website. Those auditors' reports were referred to published financial statements of the year 2002. By employing some variations of the traditional Jones-discretionary accrual model, we document that several major Greek companies in financial distress with qualified audit opinions do appear to manipulate their reported earnings by exploiting the weaknesses of the Greek GAAP.

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    Bibliographic Info

    Article provided by Inderscience Enterprises Ltd in its journal Int. J. of Accounting, Auditing and Performance Evaluation.

    Volume (Year): 5 (2008)
    Issue (Month): 1 ()
    Pages: 50-65

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    Handle: RePEc:ids:ijaape:v:5:y:2008:i:1:p:50-65

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    Keywords: auditing; earnings management; financial distress; Greece; qualified opinions; auditor awareness; Greece; auditor reporting; discretionary accruals; Athens Stock Exchange; Greek GAAP.;


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    Cited by:
    1. Papadamou, Stephanos & Tzivinikos, Trifon, 2013. "The risk relevance of International Financial Reporting Standards: Evidence from Greek banks," International Review of Financial Analysis, Elsevier, Elsevier, vol. 27(C), pages 43-54.


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