Earnings management, surplus free cash flow, and external monitoring

Journal of Business Research

Volumn 58, Issue 6, 2005, Pages 766-776

  Chung, Richard ^a   Firth, Michael ^a   Kim, Jeong Bon ^a  

^a HONG KONG POLYTECHNIC UNIVERSITY   (Hong Kong)

Author keywords

Audit quality; Earnings management; External monitoring; Institutional shareholdings; Surplus free cash flow

Indexed keywords

EID: 12144269553     PISSN: 01482963     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.jbusres.2003.12.002     Document Type: Article

References (33)

1. Arrunada B. Paz-Ares C. Mandatory rotation of company auditors: a critical examination Int. Rev. Law Econ. 17 1997 31-61
2. Barnett V. Lewis T. Outliers in statistical data 1978 Wiley New York
3. Basu S, Hwang L, Jan C-L. Auditor conservatism and fourth quarter earnings. Working paper, Baruch College; 1998.
4. Becker C.L. DeFond M.L. Jiambalvo J. Subramanyam K.R. The effect of audit quality on earnings management Contemp. Account. Res. 15 1998 1-24
5. Chung K.H. Pruitt S.W. A simple approximation of Tobin's q Financ. Manage. 23 1994 70-74
6. Chung R. Firth M. Kim J.B. Institutional monitoring and opportunistic earnings management J. Corp. Finance 8 2002 29-48
7. Chung R. Firth M. Kim J.B. Auditor conservatism and reported earnings Account. Bus. Res. 33 2003 19-32
8. Davis LR, Soo B, Trompeter G. Auditor tenure, auditor independence and earnings management. Working paper, Boston College; 2003.
9. DeAngelo L. Auditor size and audit quality J. Account. Econ. 3 1981 183-199
10. DeAngelo H. DeAngelo L. Skinner D.J. Accounting choice in troubled companies J. Account. Econ. 17 1994 113-143
11. Dechow P. Sloan R. Sweeney A. Detecting earnings management Account. Rev. 70 1995 193-225
12. Fama E.F. MacBeth J. Risk, return and equilibrium: Empirical tests J. Polit. Econ. 81 1973 607-636
13. Francis J.R. Krishnan J. Accounting accruals and auditor reporting conservatism Contemp. Account. Res. 16 1999 135-165
14. Francis J.R. Maydew E.L. Sparks H.C. The role of Big 6 auditors in the credible reporting of accruals Auditing: J. Pract. Theory 18 1999 17-34
15. Geiger M.A. Raghunandan K. Auditor tenure and audit reporting failures Auditing: J. Pract. Theory 21 2002 67-78
16. Holthausen R.W. Larcker D.F. The prediction of stock returns using financial statement information J. Financ. Econ. 15 1992 373-411
17. Jensen M.C. Agency costs of free cash flow, corporate finance and takeovers Am. Econ. Rev. 76 1986 323-329
18. Johnson V.E. Khurana I.K. Reynolds J.K. Audit-firm tenure and the quality of financial reports Contemp. Account. Res. 19 2002 637-660
19. Jones J. Earnings management during import relief investigations J. Account. Res. 29 1991 193-228
20. Judge G.G. Hill R.C. Griffiths W.E. Lutkepohl H. Lee T.C. Introduction to the theory and practice of econometrics 2nd ed. 1988 Wiley New York
21. Kim J.B. Chung R. Firth M. Auditor conservatism, asymmetric monitoring, and discretionary accrual choices Contemp. Account. Res. 20 2003 323-359
22. Knapp M. Factors that audit committee members use as surrogates for audit quality Auditing: J. Pract. Theory 10 1991 35-52
23. Krishnan J. Krishnan J. Litigation risk and auditors' resignations Account. Rev. 72 1997 539-560
24. Lindenberg E.B. Ross S.A. Tobin's q ratio and industrial organization J. Bus. 54 1981 1-32
25. Myers J, Myers LA, Omer TC. Exploring the term of the auditor-client relationship and the quality of earnings: A case for mandatory auditor rotation? Working paper, University of Illinois; 2003.
26. Newey W. West K. A simple, positive semi-definite, heteroskedasticity and autocorrelation consistent covariance matrix Econometrica 55 1987 703-708
27. Palmrose Z. An analysis of auditor litigation and audit service quality Account. Rev. 63 1988 55-73
28. Rajgopal S, Venkatachalam M, Jiambalvo J. Is institutional ownership associated with earnings management and the extent to which stock prices reflect future earnings? Working paper, Stanford University; 2002.
29. Sainty B.J. Taylor G.K. Williams D.D. Investor dissatisfaction toward auditors J. Account. Audit. Financ. 17 2002 111-136
30. Simunic D.A. Stein M.T. Product differentiation in auditing: auditor choice in the market for unseasoned new issues 1987 Canadian Certified General Accountants' Research Foundation Vancouver (BC)
31. Skinner D.J. The investment opportunity set and accounting procedure choice: Preliminary evidence J. Account. Econ. 18 1993 407-445
32. St. Pierre K. Anderson J. An analysis of the factors associated with lawsuits against public accountants Account. Rev. 59 1984 242-263
33. Watts R.L. Zimmerman J.L. Agency problems, auditing, and the theory of the firm: Some evidence J. Law Econ. 26 1983 613-633