دانلود رایگان مقاله انگلیسی کیفیت حسابرسی و ویژگی های پیش بینی های درآمد مدیریت - امرالد 2017

I. Introduction

Prior research has examined the association between corporate governance (outside directors, audit committees, board of directors) attributes and financial reporting quality (Kelton and Yang 2008; Davidson et al. 2005; Abbott et al. 2004; Klein 2002; Beasley 1996). These studies suggest that financial reporting quality could be improved by well-structured governance mechanisms. In this study, we examine whether audit quality, as one attribute of good corporate governance, along with other attributes of corporate governance extends to financial disclosure and more precisely to the choice of management earnings forecast attributes.1 Palmrose (1988) and Krishnan and Schauer (2000) suggest a general consensus that the external audit constitutes a key of corporate governance.

V. Conclusion

The focus of this study is to investigate the association between auditor quality and attributes of management earnings forecasts. We extend and refine prior studies of this relationship by employing additional controls (corporate governance, litigation risk, and proprietary cost) and by considering recent data with larger samples. We find that higher audit quality is associated with larger forecast errors, the likelihood of issuing downwardly biased forecasts, and less forecast precision.15 Our results and inferences are consistent with a high quality audit limiting management’s ability to manage earnings and management acting strategically in their choice of forecast precision, forecast error, and level of optimism. Our results appear to be conclusive and robust to the inclusion of control variables found in prior research to impact management earnings forecast errors and precision.

Our inferences assist the various stakeholders to better understand and interpret the forecasts that managers provide. For shareholders and investors, this should lead to better pricing resulting from the release of the forecast. Our results should be of interest to regulators since any regulation of management forecasts will need to be based upon understanding the strategic decisions made by management regarding the forecast attributes. In addition, it is important for auditors and regulators to understand how the attest function affects management behavior regarding forecast attributes. While the attest function may reduce earnings management (usually considered a positive outcome), it may likely also result in less informative forecasts being issued (usually considered a negative outcome).