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Issue 5(1), October 2010 -- Paper Abstracts
Girard  (p. 9-22)
Cooper (p. 23-32)
Kunz-Osborne (p. 33-41)
Coulmas-Law (p.42-46)
Stasio (p. 47-56)
Albert-Valette-Florence (p.57-63)
Zhang-Rauch (p. 64-70)
Alam-Yasin (p. 71-78)
Mattare-Monahan-Shah (p. 79-94)
Nonis-Hudson-Hunt (p. 95-106) 



JOURNAL OF ACCOUNTING AND FINANCE 


Abnormal Audit Fees and Earnings Management Using Classification Shifting


Author(s): Xudong Li, Ying Guo

Citation: Xudong Li, Ying Guo, (2018) "Abnormal Audit Fees and Earnings Management Using Classification Shifting",  Journal of Accounting and Finance, Vol. 18, ss. 5, pp.113-139

Article Type: Research paper

Publisher: North American Business Press

​Abstract:

Unlike accrual-based earnings management, earnings management through classification shifting does
not change the bottom-line numbers and thus involves lower litigation costs. Using data from years 2000- 2010, we find a significant and positive cross-sectional association between the magnitude of abnormal audit fees and the level of classification shifting, suggesting that greater abnormal audit fees allow for more classification shifting. Further, this result indicates that using abnormal audit fees to purely measure audit effort or economic bonding might be questionable as the effect of abnormal audit fees on opportunistic accounting practices could differ, depending on the specific form of earnings management activities.