Electronic Theses and Dissertations

Date of Award

2014

Document Type

Dissertation

Degree Name

Ph.D. in Accountancy

Department

Accountancy

First Advisor

Karl Wang

Second Advisor

Richard Gentry

Third Advisor

Victoria Dickinson

Relational Format

dissertation/thesis

Abstract

In this study, I examine whether and how the frequency of internal audits (continuous vs. periodic), functional independence (separate vs. combined internal audit assurance and consulting functions), and the type of earnings management (accrual-based vs. real) affect internal auditors' perception of the likelihood managers will manipulate earnings. I find that earnings management is less likely when the internal audit function uses continuous auditing, regardless of the level of independence. However, the effect of independence is context-dependent such that internal auditors expect that real (accrual-based) earnings management is less likely when the internal audit function is independent (not independent), regardless of audit frequency. The findings of this study could be of importance to regulators, accounting researchers, and audit practice.

Included in

Accounting Commons

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