Auditor Tenure, CEO Compensation and Earnings Management: Evidence from Jordan-Reference-Cited by-同舟云学术

Auditor Tenure, CEO Compensation and Earnings Management: Evidence from Jordan

Published:2022-10-11 Issue: Volume:20 Page:172-180
ISSN:2224-2899
Container-title:WSEAS TRANSACTIONS ON BUSINESS AND ECONOMICS
language:en
Short-container-title:

Author:

Alshare Hamzeh Fathi¹,Abdul Kadir Mohd Rizuan Bin²,Kamarudin Khairul Anuar³,Hassan Hasmaizan Binti⁴

Affiliation:

1. College of Management, Universiti Tenaga Nasional (UNITEN), MALAYSIA

2. College of Graduate Studies, Universiti Tenaga Nasional (UNITEN), MALAYSIA

3. Faculty of Business, University of Wollongong, Dubai, UNITED ARAB EMIRATES

4. College of Energy Economics & Social Science, Universiti Tenaga Nasional (UNITEN), MALAYSIA

Abstract

The purpose of this study is to examines the impacts of auditor tenure on earnings management and if the CEO remuneration moderates this relationship. The sample includes all firms listed on the Amman Stock Exchange from 2015 to 2019 with the exclusion of the financial sector. The fixed-effect model, robustness testing to ensure data integrity and alternative measurements to ensure reliable results were used in this study. After examining the auditor tenure in this study, the study found that there is a negative and significant association with earnings management. In additional, this study showed that the combined influence of CEO compensation and auditor tenure had a negative and significant impact on earnings management. In order to reduce earnings management by decreasing opportunistic behavior and conflicts of interest, this study emphasizes the importance of high CEO compensation and auditor tenure, which is advantageous to investors, shareholders, political, and stakeholders in Jordanian firms as well as auditing firms.

Publisher

World Scientific and Engineering Academy and Society (WSEAS)

Subject

Economics and Econometrics,Finance,Business and International Management

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