Influences Of Auditors' Individual Characteristics On Earnings Management

In the theoretical circle of accounting,earnings management is always a hotissue all around the world.Generally speaking,earnings management can be divided into accrual-based earnings management and real earnings management,accrual-based earnings management is the use of accounting principles on accounting information in order to conceal the real results of operations;Real earnings management is the manipulation of the actual business activities in order to influence the accounting profit.As an independent third-party,auditors have the great responsibility to reduce the information asymmetry between owners and managers,evaluate performance of managers and issue the audit report.Facing the behaviors of earnings management of the managers,is there any posibility for auditors to find them and control them?This question is what this paper wants to discuss.Therefore,I constructed 6 proxy variables of auditors' individual characteristics(gender,age,degree,professional,time,big4)to test the impact of that on earnings management.Domestic research literatures about earings management are abundant.But almost of them are about accrual-based earnings management.The quantity of literatures about real earnings management compared to literatures about accrual-based earnings management is small.So I select not only real earnings management but also accrual earnings management to test.We divide the paper into seven parts for the elaboration of the content.In the first section,the background knowledge and objectives of the study are introduced,and the methodology involved is also briefly illustrated;the second part focus on the theories of the related work;And on the basis of the theoretical analysis,we would make the hypothesis about the relationships between the overall EM levels of the listed companies and the auditors' individual characteristics in the third part;the fourth part is the overall study design;the fifth and sixth part of this paper is an empirical study about the auditors' individual characteristics and the EM.On which basis,the hypothesis would be tested using statistical software STATA.The seventh chapter is the conclusion and recommendation part of the paper.Based on the results of theoretical and empirical analysis,some final conclusions would be drawn;and this chapter also makes recommendations from the perspectives of auditors,corporate governance and external regulatory respectively;the final content of this part points out the deficiencies in the course of the study and the directions for future research.In this paper,the empirical results obtained are as follows:(1)Among the auditors' individual characteristics,degree,time and big4 are notably negative related to the accrual-based earnings management.Gender,age and professional have no notably relation to the accrual-based earnings management.It means that auditors' individual characteristics have huge impact to the accrual-based earnings management.(2)To a certain extent,Gender is notably positive related to the real earnings management.Big4 is notably negative related tco the real earnings management.Age,time,degree and 'professional have no notably relation to the real earnings management.lt means that auditors'individual characteristics just have a little impact to the accrual-based earnings management.The contribution of this paper is to enrich the study of the auditors,individual characteristics and Real EM.However,this paper also has a few inadequacies.Firstly,as the data is taken in a relatively short time span,the stability of the conclusions needs further witness;secondly,the control variables added in this model may not be comprehensive enough,so the validity of the model also need further study.