ISSN: 2222-6990
Open access
This study aims to assess the impact of earnings manipulation on the changes in value relevance level, using audit quality as the mediating variable. For this reason, one hypothesis was established. These hypotheses were evaluated on 82 industrial product businesses listed on Bursa Malaysia after the implementation of MFRS, hence the study period began after 2012 due to the switch from international (IFRS) to Malaysian financial reporting standards (MFRS). The information was also acquired from financial reports published on the Bursa Malaysia website. The information was also acquired from financial reports published on the Bursa Malaysia website. The association between the market value of equity per share (MVEPS) and the book value of equity per share (BVEPS), earning per share (EPS), and dividend per share was initially investigated using multiple regression (DPS). This was done to establish the amount of value significance. The nature of the research variables and the relationships between the variables in the study sample were then investigated using descriptive statistics and a correlation matrix.
Cheng, A. C. S., Zishang Liu, C., Thomas, W. (2012). Abnormal Accrual Estimates and Evidence of Mispricing. Journal of Business Finance and Accounting, 39(1–2), 1–34.
Alfraih, M. M. (2016). The role of audit quality in firm valuation: Evidence from an emerging capital market with a joint audit requirement. International Journal of Law and Management, 58(5), 575–598.
ALTINTA?, A. T., SARI, E. S., & OTLUO?LU, E. (2017). THE IMPACT OF EARNINGS MANAGEMENT ON THE VALUE RELEVANCE OF EARNINGS: EMPIRICAL EVIDENCE FROM TURKEY. Journal of International Social Research, 10(51).
Amidu, M., Kwakye, T. O., Harvey, S., & Yorke, M. S. (2016). Do firms manage earnings and avoid tax for corporate social responsibility?
BAXEVANAKI, S. (2018). ACCOUNTING FRAUD IN BUSINESSES.
Blaylock, B., Gaertner, F., & Shevlin, T. (2015). The association between book-tax conformity and earnings management. Review of Accounting Studies, 20(1), 141–172.
Dewi, N. P. S. P., & Wirama, D. G. (2019). Debt covenant slack, earnings management, and value relevance of accounting information. International Research Journal of Management, IT and Social Sciences, 6(4), 86–96.
Dumay, J., & Guthrie, J. (2017). Involuntary disclosure of intellectual capital: is it relevant? Journal of Intellectual Capital.
Elbakry, A. E., Nwachukwu, J. C., Abdou, H. A., & Elshandidy, T. (2017). Comparative evidence on the value relevance of IFRS-based accounting information in Germany and the UK. Journal of International Accounting, Auditing and Taxation, 28, 10–30.
Elliott, B. (2018). Financial Accounting and Reporting 11 edition. Pearson Education.
Georgiou, O. (2018). The worth of fair value accounting: dissonance between users and standard setters. Contemporary Accounting Research, 35(3), 1297–1331.
Habbash, M., & Alghamdi, S. (2017). Audit quality and earnings management in less developed economies: the case of Saudi Arabia. Journal of Management & Governance, 21(2), 351–373.
Huang, J., Mei, Z., & Li, Z. (2020). Business and financial information integration and voluntary management earnings forecasts. China Journal of Accounting Research, 13(3), 291–307.
Kim, J., LI, Y., & Zhang, L. (2011). Corporate tax avoidance and stock price crash risk?: Firm-level analysis. Journal of Financial Economics, 100(3), 639–662. https://doi.org/http://doi.org/10.1016/j.jfineco.2010.07.007 Corporate
Kothari, S. P., Leone, A. J., & Wasley, C. E. (2005). Performance matched discretionary accrual measures. Journal of Accounting and Economics, 39(1), 163–197.
Kouki, A. (2018). IFRS and value relevance. Journal of Applied Accounting Research.
Mahama, M. (2015). Detecting corporate fraud and financial distress using the Altman and Beneish models. International Journal of Economics, Commerce and Management, 3(1), 1–18.
Mirza, A., Malek, M., & Abdul-Hamid, M. A. (2019). Value Relevance of Earnings and Book Value of Equity: Evidence from Malaysia. Global Business Management Review, 10(2), 1940.
Mostafa, W. (2017). The impact of earnings management on the value relevance of earnings. Managerial Auditing Journal.
Narayanaswamy, R. (2017). Financial accounting: a managerial perspective. PHI Learning Pvt. Ltd.
Oats, L., & Tuck, P. (2019). Corporate tax avoidance: is tax transparency the solution? Accounting and Business Research, 49(5), 565–583.
Perols, J. L., & Lougee, B. A. (2011). The relation between earnings management and financial statement fraud. Advances in Accounting, 27(1), 39–53. https://doi.org/10.1016/j.adiac.2010.10.004
Pipatnarapong, J. (2020). Essays on Tax Avoidance. Bangor University (United Kingdom).
Rashid, N. M., & Norfadzilah, N. M. (2017). Earnings management and corporate tax planning and their impacts on firm value/Nik Mohd Norfadzilah Nik Mohd Rashid.
Robu, M. A., & others. (2014). The Level Of Knowledge In The Value Relevance Literature. CES Working Papers, 6(4), 122–135.
Salamudin, N., Bakar, R., Kamil Ibrahim, M., & Haji Hassan, F. (2010). Intangible assets valuation in the Malaysian capital market. Journal of Intellectual Capital, 11(3), 391–405.
Sukotjo, C., & Soenarno, Y. N. (2018). Tax Aggressiveness , Accounting Fraud , and Annual Report Readability. Journal of Finance and Economics, 6(2), 38–42. https://doi.org/10.12691/jfe-6-2-1
Taheri, M., Bahadori, M., & Kamrani, H. (2014). The Relationship between Earnings Quality and Audit Commenting on the Listed Companies in Tehran Stock Exchange. Academic Journal of Accounting and Economics Researches, 3(3), 269–277. https://doi.org/10.2139/ssrn.2454525
Veith, S., & Werner, J. R. (2014). Comparative Value Relevance Studies: Country Differences Versus Specification Effects. The International Journal of Accounting, 49(3), 301–330. https://doi.org/10.1016/j.intacc.2014.07.002
Young, S. D. (2020). Financial Statement Fraud: Motivation, Methods, and Detection. In Corporate Fraud Exposed. Emerald Publishing Limited.
In-Text Citation: (Sulaiman & Rashid, 2023)
To Cite this Article: Sulaiman, A. A., & Rashid, N. (2023). The Mediating Effect of Audit Quality on the Relationships Between Earnings Manipulation and the Changes in Value Relevance Level. International Journal of Academic Research in Business and Social Sciences, 13(8), 1652– 1666.
Copyright: © 2023 The Author(s)
Published by HRMARS (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode