Audit Rotation And Earnings Quality: An Analysis Using Discretionary Accruals
This article aims to measure the effect of the audit firm rotation on the earnings quality of Brazilian public companies listed on BM&FBOVESPA in the period from 2008 to 2015. We use discretionary accruals as a measure of earnings quality, using two approaches: earnings management and the estima...
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| Format: | Article |
| Language: | English |
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FUCAPE Business School
2018-01-01
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| Series: | BBR: Brazilian Business Review |
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| Online Access: | http://www.redalyc.org/articulo.oa?id=123057435001 |
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| _version_ | 1825207241994665984 |
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| author | Adalene Olivia Silvestre Cristiano Machado Costa Clóvis Antônio Kronbauer |
| author_facet | Adalene Olivia Silvestre Cristiano Machado Costa Clóvis Antônio Kronbauer |
| author_sort | Adalene Olivia Silvestre |
| collection | DOAJ |
| description | This article aims to measure the effect of the audit firm rotation on the earnings quality of Brazilian public companies listed on BM&FBOVESPA in the period from 2008 to 2015. We use discretionary accruals as a measure of earnings quality, using two approaches: earnings management and the estimation errors. Results show that audit firm rotation reduced the volume of discretionary accruals and, thus, increases the earnings quality, when these are measured from the perspective of earnings management. However, we do not observe the effect of audit firm rotation on earnings quality when the discretionary accruals are measured from the perspective of accounting estimation errors. The results also show that companies that rotate audit firms voluntarily have greater discretionary accruals and, consequently, lower earnings quality. |
| format | Article |
| id | doaj-art-25c96c7832224e038ae77038a5c54fc7 |
| institution | Kabale University |
| issn | 1807-734X |
| language | English |
| publishDate | 2018-01-01 |
| publisher | FUCAPE Business School |
| record_format | Article |
| series | BBR: Brazilian Business Review |
| spelling | doaj-art-25c96c7832224e038ae77038a5c54fc72025-02-06T23:39:32ZengFUCAPE Business SchoolBBR: Brazilian Business Review1807-734X2018-01-0115541042610.15728/bbr.2018.15.5.1Audit Rotation And Earnings Quality: An Analysis Using Discretionary AccrualsAdalene Olivia SilvestreCristiano Machado CostaClóvis Antônio KronbauerThis article aims to measure the effect of the audit firm rotation on the earnings quality of Brazilian public companies listed on BM&FBOVESPA in the period from 2008 to 2015. We use discretionary accruals as a measure of earnings quality, using two approaches: earnings management and the estimation errors. Results show that audit firm rotation reduced the volume of discretionary accruals and, thus, increases the earnings quality, when these are measured from the perspective of earnings management. However, we do not observe the effect of audit firm rotation on earnings quality when the discretionary accruals are measured from the perspective of accounting estimation errors. The results also show that companies that rotate audit firms voluntarily have greater discretionary accruals and, consequently, lower earnings quality.http://www.redalyc.org/articulo.oa?id=123057435001audit rotationearnings qualitydiscretionary accrualsearnings managementestimation errors |
| spellingShingle | Adalene Olivia Silvestre Cristiano Machado Costa Clóvis Antônio Kronbauer Audit Rotation And Earnings Quality: An Analysis Using Discretionary Accruals BBR: Brazilian Business Review audit rotation earnings quality discretionary accruals earnings management estimation errors |
| title | Audit Rotation And Earnings Quality: An Analysis Using Discretionary Accruals |
| title_full | Audit Rotation And Earnings Quality: An Analysis Using Discretionary Accruals |
| title_fullStr | Audit Rotation And Earnings Quality: An Analysis Using Discretionary Accruals |
| title_full_unstemmed | Audit Rotation And Earnings Quality: An Analysis Using Discretionary Accruals |
| title_short | Audit Rotation And Earnings Quality: An Analysis Using Discretionary Accruals |
| title_sort | audit rotation and earnings quality an analysis using discretionary accruals |
| topic | audit rotation earnings quality discretionary accruals earnings management estimation errors |
| url | http://www.redalyc.org/articulo.oa?id=123057435001 |
| work_keys_str_mv | AT adaleneoliviasilvestre auditrotationandearningsqualityananalysisusingdiscretionaryaccruals AT cristianomachadocosta auditrotationandearningsqualityananalysisusingdiscretionaryaccruals AT clovisantoniokronbauer auditrotationandearningsqualityananalysisusingdiscretionaryaccruals |