Auditor Specialization and Accounting Accrual Shopping in Indonesia

Authors

  • Masculline Muhammad Muqorobin Universitas Tidar
  • Mumpuni Wahyudiarti Sitoresmi Universitas Tidar

Keywords:

Accounting Accrual Shopping, Auditor Switching, Auditor Specialization, Accrual Earnings Management, Indonesia

Abstract

This research is aimed to examine the effect of auditors switching to the non-specialist auditor on accrual earnings management. This research uses industry and year fixed-effect regression. The research sample consists of 456 manufacture firms-years on Indonesian Stock Exchange listed 2013 to 2016. Based on industry and year fixed-effect regression, when the firm switches auditor to a non-specialist auditor, accrual earnings management will be increased. It is caused by the unfamiliarity of new auditor with the firm’s business activities and operations cannot be minimized because new auditor has low knowledge of firm industry and it leads to the inability of new auditor to detects accrual earnings management. This result confirms that accounting accrual shopping happens in Indonesian Stock Exchange, especially in manufacturing firms.

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Published

2023-03-01