Perceived Auditor Quality and the Earnings Response Coefficient (ERC)

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Researchers
Siew Hong Teoh and T.J. Wong (1990)

Documentation
The Accounting Review Vol. 68 No. 2, April 1993, pp. 345-368

Purpose
To find out the relationship between audit quality and earnings management.

Method
This study applied a single analytical formulae to relate the response to stock price and stock signal precision. Theory used int this study was a theory of single information signal (Holthausen and Verrecchia, 1998). The study used samples from industrial firm database of the Compustat. The firms were also listed on NYSE, AMEX, and NASDAQ. The samples were divided into two major groups: Big Eight (B8) and Non-Big Eight (NB8), in which the latter group consisted of firm-pairs which had been removed from the B8 to the NB, and vise versa.

Results
The clients' ERC in the B8 group was statistically higher than that of NB8. This result supported the conclusions of the previous studies that there were effects from several explanatory factors such as growth and persistence, risk, size, and pre-disclosure information environment.

Kualitas Auditor Persepsian dan Koefisien Respon Laba (ERC)
Tujuan
Untuk mengetahui hubungan antara kualitas audit dan manajemen laba.

Metode
Penelitian ini menggunakan sebuah rumus analitik sederhana untuk menghubungkan respon terhadap harga sahap dan ketepatan sinyal saham. Teori yang digunakan di dalam penelitian adalah teori sinyal informasi tunggal (Holthausen dan Verrecchia, 1998). Penelitian menggunakan sampel dari database perusahaan industri dari Compustat. Perusahaan yang dijadikan sampel terdaftar pada NYSE, AMEX, dan NASDAQ dan terbagi ke dalam dua kelompok utama: Big Eight (B8) dan Non-Big Eight (NB8). Kelompok yang disebut terakhir terdiri atas pasangan perusahaan yang tidak termasuk ke dalam kelompok B8 dan dimasukkan ke dalam kelompok NB8, begitu pula sebaliknya.

Hasil
ERC para klien pada kelompok ERC secara statistik lebih tinggi dibandingkan mereka dari kelompok NB8. Hasil ini mendukung simpulan penelitian-penelitian terdahulu tentang adanya pengaruh dari sejumlah faktor eksplanatori, seperti pertumbuhan dan persistensi, resiko, ukuran dan lingkungan informasi 'pre-disclosure'.

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