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Mattias Haraldsson
Senior lecturer
![Mattias Haraldsson. Photo.](/sites/lusem.lu.se/files/styles/lu_personal_page_desktop/public/2024-04/MattiasHaraldsson.jpg.webp?itok=5Y13ME2B)
Do audit firm and audit costs/fees influence earnings management in Swedish municipalities?
Author
Summary, in English
Previous research on the private sector shows that auditors and auditing firms are important actors in ensuring high-quality reporting based on accrual accounting. The aim of this study is to explore whether audit firms and audit costs/fees influence municipalities’ probability of applying earnings management in their annual accounts. The empirical data, which covered the financial years 2011–13, were handpicked from annual reports or retrieved from other sources. In general, our study shows that the probability of earnings management increased if audit costs/fees increased. However, there were differences regarding the probability of earnings management relating to which audit firm was engaged. This implies that audit quality is a factor that affects the probability of earnings management in Swedish municipalities. The study also indicates that different audit firms make different trade-offs between professional versus commercial logics, and that this is reflected in the clients’ propensity to engage in earnings management.
Department/s
- Department of Business Administration
Publishing year
2019-12-01
Language
English
Pages
673-691
Publication/Series
International Review of Administrative Sciences
Volume
85
Issue
4
Document type
Journal article
Publisher
SAGE Publications
Topic
- Business Administration
Status
Published
Project
- Public Management Research
ISBN/ISSN/Other
- ISSN: 1461-7226