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- Jere R. Francis
- a University of Missouri–Columbia
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- Edward L. Maydew
- b University of North Carolina at Chapel Hill.
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- H. Charles Sparks
- c University of Alaska Fairbanks.
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説明
<jats:p>This study investigates if the use of a Big 6 auditor is increasing in the firm's endogenous propensity to generate accruals. High-accrual firms have greater scope for aggressive and/or opportunistic earnings management and therefore have an incentive to hire a Big 6 auditor to provide assurance that reported earnings are credible. For a large sample of NASDAQ firms over the period 1975–1994 we find that the likelihood of using a Big 6 auditor is increasing in firms' endogenous propensity for accruals. Even though Big-6-audited firms have higher levels of total accruals, we also find they have lower amounts of estimated discretionary accruals. This finding is consistent with Big 6 auditors constraining aggressive and potentially opportunistic reporting of accruals.</jats:p>
収録刊行物
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- AUDITING: A Journal of Practice & Theory
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AUDITING: A Journal of Practice & Theory 18 (2), 17-34, 1999-09-01
American Accounting Association