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Factors Affecting Detection of Manipulation in Financial Statements: An Empirical Study from Auditors’ Perspective

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  • Mahami, Zouleykha
  • Mouloudj, Kamel

Abstract

This study examines whether independence of external auditor, auditor industry specialization and ethical commitment of external auditor, improves the ability to detect manipulation in Financial Statements. Using a 25-item questionnaire and convenience sampling method, the data were collected from 76 auditors. The results show that the auditor industry specialization and ethical commitment of auditor have a significant positive impact on detect manipulation in Financial Statements. While independence of auditor not significantly affecting detect manipulation.

Suggested Citation

  • Mahami, Zouleykha & Mouloudj, Kamel, 2020. "Factors Affecting Detection of Manipulation in Financial Statements: An Empirical Study from Auditors’ Perspective," MPRA Paper 108008, University Library of Munich, Germany, revised 30 Jun 2020.
    • Handle: RePEc:pra:mprapa:108008
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    References listed on IDEAS

    as
    1. Madan Lal Bhasin, 2016. "Accounting Manipulation Practices in Financial Statements: An Experience of an Asian Economy," International Journal of Economics and Financial Research, Academic Research Publishing Group, vol. 2(11), pages 199-214, 11-2016.
    2. Antle, R, 1984. "Auditor Independence," Journal of Accounting Research, Wiley Blackwell, vol. 22(1), pages 1-20.
    3. Solomon, I & Shields, MD & Whittington, OR, 1999. "What do industry-specialist auditors know?," Journal of Accounting Research, Wiley Blackwell, vol. 37(1), pages 191-208.
    4. Tak ISA, 2011. "Impacts and Losses Caused By the Fraudulent and Manipulated Financial Information on Economic Decisions," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 12(5), pages 929-939, December.
    5. DeAngelo, Linda Elizabeth, 1981. "Auditor size and audit quality," Journal of Accounting and Economics, Elsevier, vol. 3(3), pages 183-199, December.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Independence; Ethics of auditor; Auditor Specialization; Manipulation; Financial Statements.;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation
    • M49 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Other

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