Internal Auditing Quality and Earnings Management: Evidence from Sultanate of Oman
DOI:
https://doi.org/10.15282/jgi.4.2.2021.6054Keywords:
Internal Auditing Quality, Earning Management, OmanAbstract
The main purpose of this research is to determine the link between internal auditing quality and earnings management in Omani companies. In this research, a sample size of 80 was designated from two sectors (Industrial, and Service) in Muscat Securities Market (MSM) in Sultanate of Oman. The secondary data collected is examined with Smart PLS 3.0. The findings of the research show a positive link between Internal audit quality and earnings management in both sectors (industrial and service). This finding indicates that the increase in audit quality will affect to enhance and improve the earning management in Omani listed firms.
References
Ahmed, E. R., Alabdullah, T. T. Y., Shaharudin, M. S., & Putri, E. (2020). Further Evidence on the Link Between Firm's Control Mechanisms and Firm Financial Performance: Sultanate of Oman. Journal of Governance and Integrity, 4(1), 6-11.
Ahmed, E. R., Alabdullah, T. T. Y., & Shaharudin, M. S. (2020). Approaches to Control Mechanisms and Their Implications for Companies’ Profitability: a Study in UAE. Journal of Accounting Science, 4(2), 11-20.
Alabdullah, T. T. Y., & Ahmed, E. R. (2020). Audit Committee Impact on Corporate Profitability in Oman Companies: an Auditing and Management Accounting Perspective. Riset Akuntansi dan Keuangan Indonesia, 5(2), 121-128.
Alabdullah, T. T. Y., Ahmed ER & Abushammala S. (2020). Growth of Companies: Empirical Study of the Companies Listed in Developing Economies. Journal of Accounting Science, 4(2), 1-10.
Alam, N., Ramachandran, J., & Nahomy, A. H. (2020). The Impact of Corporate Governance and Agency Effect on Earnings Management–A Test of the Dual Banking System. Research in International Business and Finance, 101242.
Alareeni, B. (2018). The impact of firm-specific characteristics on earnings management: evidence from GCC countries. International Journal of Managerial and Financial Accounting, 10(2), 85-104.
Alhebri, A. A., & Al-Duais, S. D. (2020). Family businesses restrict accrual and real earnings management: Case study in Saudi Arabia. Cogent Business & Management, 7(1), 1806669.
Almarayeh, T. S., Aibar-Guzmán, B., & Abdullatif, M. (2020). Does audit quality influence earnings management in emerging markets? Evidence from Jordan:¿ Influye la calidad de la auditoría en la gestión de resultados en los mercados emergentes? Evidencia de Jordania. Revista de Contabilidad-Spanish Accounting Review, 23(1), 64-74.
Amrah, M. R., & Obaid, M. M. (2019). Effective corporate governance mechanisms, ownership structure and financial reporting quality: evidence from Oman. Asia-Pacific Management Accounting Journal, 14(3), 121-154.
Awadallah, E. (2020). Measuring the effectiveness of selected corporate governance practices and their implications for audit quality: evidence from Qatar. Afro-Asian Journal of Finance and Accounting, 10(1), 24-47.
Baatwah, S. R., Salleh, Z., & Ahmad, N. (2018). High-quality auditors vs. high-quality audit: the reality in Oman. Afro-Asian Journal of Finance and Accounting, 8(3), 209-236.
Badhabi, H. A. S., & Ku Ismail, K. N. I. (2017). Audit Committee Characteristics and Firm Performance in Oman.
Bala, H., & Kumai, G. B. (2015). Audit committee characteristics and earnings quality of listed food and beverages firms in Nigeria. International Journal of Accounting, Auditing and Taxation, 2(8), 216-227.
Elghuweel, M. I., Ntim, C. G., Opong, K. K., & Avison, L. (2017). Corporate governance, Islamic governance and earnings management in Oman. Journal of Accounting in Emerging Economies.
Elsiddig Ahmed, I. (2020). The qualitative characteristics of accounting information, earnings quality, and Islamic banking performance: Evidence from the gulf banking sector. International Journal of Financial Studies, 8(2), 30.
Flayyih, H. H., Ali, S. I., & Mohammed, Y. N. (2018). The Effect of Integration of Coroprate Governance Mechanisms and Audit Quality in Earning Management: An Empirical Analysis of Listed Banks in Iraqi Stock Exchange. International Journal of Engineering & Technology, 7(4.25), 337-344.
Gebrayel, E., Jarrar, H., Salloum, C., & Lefebvre, Q. (2018). Effective association between audit committees and the internal audit function and its impact on financial reporting quality: Empirical evidence from Omani listed firms. International Journal of Auditing, 22(2), 197-213.
Hamdan, A. (2020). The role of the audit committee in improving earnings quality: The case of industrial companies in GCC. Journal of International Studies, 13(2).
HassanOMER, W. K., Aljaaidi, K. S., & Habtoor, O. S. (2020). Board Quality, Audit Quality and Economic Firm Value: The Case of Manufactured Saudi's Listed Companies. Quality-Access to Success, 21(178).
Ibrahim, G., Mansor, N., & Ahmad, A. U. The Mediating Effect Of Internal Audit Committee On The Relationship Between Firms Financial Audits And Real Earnings Management.
Jessica, V. (2020). The Effect of firm characteristics and good corporate governance characteristics to earning management behaviors. Journal of Accounting, Finance and Auditing Studies, 6(2), 31-49.
Lassoued, N., Attia, M. B. R., & Sassi, H. (2018). Earnings management in islamic and conventional banks: Does ownership structure matter? Evidence from the MENA region. Journal of International Accounting, Auditing and Taxation, 30, 85-105.
Lestari, T., & Hanifah, I. A. (2020). HOW CORPORATE GOVERNANCE AND CASH HOLDINGS AFFECT EARNINGS QUALITY AND FIRM VALUE. TRIKONOMIKA, 19(1), 16-21.
Nwoye, C. M., Anichebe, A. S., & Osegbue, I. F. Effect of Audit Quality on Earnings Management in Insurance Companies in Nigeria.
Sanad, Z., Shiwakoti, R., & Kukreja, G. (2019). The Role of corporate governance in mitigating real earnings management: Literature review. KnE Social Sciences, 173-187.
Yasser, S., & Soliman, M. (2018). The effect of audit quality on earnings management in developing countries: The case of Egypt. International Research Journal of Applied Finance, 9(4), 216-231.
Zuo, L., & Guan, X. (2014). The association of audit firm size and industry specialization on earnings management: evidence in China. The Macrotheme Review, 3(7), 1-21.
Ahmed, E. R., Alabdullah, T. T. Y., & Shaharudin, M. S. (2020). Approaches to Control Mechanisms and Their Implications for Companies’ Profitability: a Study in UAE. Journal of Accounting Science, 4(2), 11-20.
Alabdullah, T. T. Y., & Ahmed, E. R. (2020). Audit Committee Impact on Corporate Profitability in Oman Companies: an Auditing and Management Accounting Perspective. Riset Akuntansi dan Keuangan Indonesia, 5(2), 121-128.
Alabdullah, T. T. Y., Ahmed ER & Abushammala S. (2020). Growth of Companies: Empirical Study of the Companies Listed in Developing Economies. Journal of Accounting Science, 4(2), 1-10.
Alam, N., Ramachandran, J., & Nahomy, A. H. (2020). The Impact of Corporate Governance and Agency Effect on Earnings Management–A Test of the Dual Banking System. Research in International Business and Finance, 101242.
Alareeni, B. (2018). The impact of firm-specific characteristics on earnings management: evidence from GCC countries. International Journal of Managerial and Financial Accounting, 10(2), 85-104.
Alhebri, A. A., & Al-Duais, S. D. (2020). Family businesses restrict accrual and real earnings management: Case study in Saudi Arabia. Cogent Business & Management, 7(1), 1806669.
Almarayeh, T. S., Aibar-Guzmán, B., & Abdullatif, M. (2020). Does audit quality influence earnings management in emerging markets? Evidence from Jordan:¿ Influye la calidad de la auditoría en la gestión de resultados en los mercados emergentes? Evidencia de Jordania. Revista de Contabilidad-Spanish Accounting Review, 23(1), 64-74.
Amrah, M. R., & Obaid, M. M. (2019). Effective corporate governance mechanisms, ownership structure and financial reporting quality: evidence from Oman. Asia-Pacific Management Accounting Journal, 14(3), 121-154.
Awadallah, E. (2020). Measuring the effectiveness of selected corporate governance practices and their implications for audit quality: evidence from Qatar. Afro-Asian Journal of Finance and Accounting, 10(1), 24-47.
Baatwah, S. R., Salleh, Z., & Ahmad, N. (2018). High-quality auditors vs. high-quality audit: the reality in Oman. Afro-Asian Journal of Finance and Accounting, 8(3), 209-236.
Badhabi, H. A. S., & Ku Ismail, K. N. I. (2017). Audit Committee Characteristics and Firm Performance in Oman.
Bala, H., & Kumai, G. B. (2015). Audit committee characteristics and earnings quality of listed food and beverages firms in Nigeria. International Journal of Accounting, Auditing and Taxation, 2(8), 216-227.
Elghuweel, M. I., Ntim, C. G., Opong, K. K., & Avison, L. (2017). Corporate governance, Islamic governance and earnings management in Oman. Journal of Accounting in Emerging Economies.
Elsiddig Ahmed, I. (2020). The qualitative characteristics of accounting information, earnings quality, and Islamic banking performance: Evidence from the gulf banking sector. International Journal of Financial Studies, 8(2), 30.
Flayyih, H. H., Ali, S. I., & Mohammed, Y. N. (2018). The Effect of Integration of Coroprate Governance Mechanisms and Audit Quality in Earning Management: An Empirical Analysis of Listed Banks in Iraqi Stock Exchange. International Journal of Engineering & Technology, 7(4.25), 337-344.
Gebrayel, E., Jarrar, H., Salloum, C., & Lefebvre, Q. (2018). Effective association between audit committees and the internal audit function and its impact on financial reporting quality: Empirical evidence from Omani listed firms. International Journal of Auditing, 22(2), 197-213.
Hamdan, A. (2020). The role of the audit committee in improving earnings quality: The case of industrial companies in GCC. Journal of International Studies, 13(2).
HassanOMER, W. K., Aljaaidi, K. S., & Habtoor, O. S. (2020). Board Quality, Audit Quality and Economic Firm Value: The Case of Manufactured Saudi's Listed Companies. Quality-Access to Success, 21(178).
Ibrahim, G., Mansor, N., & Ahmad, A. U. The Mediating Effect Of Internal Audit Committee On The Relationship Between Firms Financial Audits And Real Earnings Management.
Jessica, V. (2020). The Effect of firm characteristics and good corporate governance characteristics to earning management behaviors. Journal of Accounting, Finance and Auditing Studies, 6(2), 31-49.
Lassoued, N., Attia, M. B. R., & Sassi, H. (2018). Earnings management in islamic and conventional banks: Does ownership structure matter? Evidence from the MENA region. Journal of International Accounting, Auditing and Taxation, 30, 85-105.
Lestari, T., & Hanifah, I. A. (2020). HOW CORPORATE GOVERNANCE AND CASH HOLDINGS AFFECT EARNINGS QUALITY AND FIRM VALUE. TRIKONOMIKA, 19(1), 16-21.
Nwoye, C. M., Anichebe, A. S., & Osegbue, I. F. Effect of Audit Quality on Earnings Management in Insurance Companies in Nigeria.
Sanad, Z., Shiwakoti, R., & Kukreja, G. (2019). The Role of corporate governance in mitigating real earnings management: Literature review. KnE Social Sciences, 173-187.
Yasser, S., & Soliman, M. (2018). The effect of audit quality on earnings management in developing countries: The case of Egypt. International Research Journal of Applied Finance, 9(4), 216-231.
Zuo, L., & Guan, X. (2014). The association of audit firm size and industry specialization on earnings management: evidence in China. The Macrotheme Review, 3(7), 1-21.
Downloads
Published
2021-05-17
How to Cite
Alyaarubi, H. J., Alkindi, D. S., & Ahmed, E. R. (2021). Internal Auditing Quality and Earnings Management: Evidence from Sultanate of Oman. Journal of Governance and Integrity, 4(2), 115–124. https://doi.org/10.15282/jgi.4.2.2021.6054
Issue
Section
JGI Vol. 4, Issue 2, July 2021
License
Copyright (c) 2021 Hind Juma Alyaarubi, Dua Said Alkindi, Essia Ries Ahmed, Dr.
This work is licensed under a Creative Commons Attribution 4.0 International License.
