Samir Ibrahim Abdelazim, Saleh Aly Saleh Aly and Ahmed Diab
This study aims to examine the relationship between financial report readability (FRR) and audit fees (AF) by bringing evidence from an emerging market. In addition, it reveals…
Abstract
Purpose
This study aims to examine the relationship between financial report readability (FRR) and audit fees (AF) by bringing evidence from an emerging market. In addition, it reveals the moderating influence of board gender diversity (BGD) on such a relationship.
Design/methodology/approach
The authors analyzed data collected manually from the financial reports of Egyptian nonfinancial firms listed on the Egyptian Stock Exchange between 2016 and 2021 using Pooled OLS, Random effects, Fixed effects regressions.
Findings
The authors found a negative relationship between FRR and AF. Likewise, BGD is found to be negatively related to AF, and positively associated with FRR. In addition, the authors found that the negative association between FRR and AF is more pronounced in the case of BGD.
Originality/value
This paper contributes to previous research on the auditors’ reactions to the clarity of financial reporting as well as the role of board gender concerning the FRR-audit pricing relationship in emerging markets.
Details
Keywords
Ammad Ahmed, Atia Hussain and Abiot M. Tessema
This study aims to examine the association between audit partner busyness and audit quality. Moreover, this research investigates whether boardroom gender diversity moderates the…
Abstract
Purpose
This study aims to examine the association between audit partner busyness and audit quality. Moreover, this research investigates whether boardroom gender diversity moderates the relationship between audit partner busyness and audit quality in Australia.
Design/methodology/approach
The study sample consists of all public companies listed on the Australian Stock Exchange from 2005 to 2014. The data is obtained from SIRCA and the Morning Star databases. The study uses fixed effects and logistic regression techniques to test the relationship between audit partner busyness, boardroom gender diversity and audit quality.
Findings
The collected empirical evidence shows that audit partner busyness is negatively associated with audit quality. In contrast, boardroom gender diversity moderates the relationship between audit partner busyness and audit quality. More specifically, the results suggest that board gender diversity mitigates the negative impact of audit partners’ busyness on the audit quality. The results are robust to endogeneity and alternative definitions of audit partner busyness, boardroom gender diversity and audit quality.
Practical implications
The study’s findings will be of interest to policymakers, regulators and investors in the Australian market. The results show the importance of gender-diverse boards in companies’ audit functions, particularly in the presence of busy audit partners, and hence support the call for more women on corporate boards in Australia. Moreover, the results call for a cap or upper limit on the number of clients an audit partner can take on based on their capacity.
Originality/value
The authors contribute to the growing literature on board gender diversity, audit partner busyness and audit quality. Although a plethora of prior literature suggests a negative association between audit partner busyness and audit quality, the results suggest that women in the boardroom positively moderate the relationship between audit partner busyness and audit quality.
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Shima Abdi and Afsaneh Soroushyar
The purpose of this study is to examine the impact of anti-money laundering (AML) regulations on accrual earnings management (AEM) and real earnings management (REM) in Iran’s…
Abstract
Purpose
The purpose of this study is to examine the impact of anti-money laundering (AML) regulations on accrual earnings management (AEM) and real earnings management (REM) in Iran’s emerging capital market.
Design/methodology/approach
The panel data regression is used to testing hypotheses. The sample includes 2,020 data and 202 companies listed on the Tehran Stock Exchange (TSE) over a period of ten years from 2012 to 2021. Also, the companies covered in this study include financial and nonfinancial companies. Furthermore, the data related to the research variables were extracted from the annual financial statements and the TSE database.
Findings
The results show that compliance with AML regulations leads to a reduction in AEM and REM. In other words, companies with higher money laundering (ML) tend to manage their earnings, which is in line with agency theory.
Practical implications
This study has implication for policymakers and regulators, auditors and managers. Considering the negative impact of AML regulations on earnings management (EM), Iranian auditing firms need to emphasize on the full implementation of AML regulations in TSE. Also, the results of this research may aid policymakers and regulators to detect financial crimes through accounting signals.
Originality/value
To the best of the authors’ knowledge, this is the first study in an Iran capital market to examine the impact of AML regulations on EM in financial and nonfinancial companies. Previous research has not controlled for the effects of financial companies. Prior studies have not examined the effects of financial companies. In addition, this study differentiates itself from previous studies by introducing a new method for measuring the independent ML variable based on auditor opinions. The obtained data can aid international bodies to better understand compliance with ML regulations in Iran and can reduce their concerns in negotiations.