Soo Authors Trombetta Trompeter & & & Cameran, Becker, DeFond, Davis, Prencipe Subramanyam (2012) Jiambalvo (1998) (2000) the the the of of tenure of partner firm for level level accruals. accruals. accruals, auditor audit audit the the the association correlation correlation Outcomes the the the dispersion and tenure. and and controlling the Negative Negative Negative between discretionary between discretionary between discretionary partner and current after tenure tenure of are the for the its of tested, these the one partner effect after accruals. are of used are as model. and a accruals are and earnings the accruals testing the effect are testing tests including for the for company, using tenure, the version Jones for growth, Models current Methodology tenure, the univariate firm proxies hypotheses discretionary and of regarding measuring multivariate measured modified Both Discretionary Two Two quality, performed hypotheses. one partner designed hypotheses, variables. and audit controlling age regarding size tenure. Journal sources database. Economic Data database Compustat Taiwan (TEJ) US 5.213 year initial the the of the an companies in from from year total a have previous Sample observations. period period or firm offering with that the the year Taiwanese excluded 42.302 observations 888 public current are sample. from from firm Items of in of of the the tenure of on quality of firm Subject effect effect the The The on quality published earnings. audit earnings. relationship the terms tenure
Authors Cameran, Prencipe & Trombetta (2012) Becker, DeFond, Jiambalvo & Subramanyam (1998) Davis, Soo & Trompeter (2000) Outcomes Negative association between the auditor tenure and the dispersion of the current and the discretionary accruals. Negative correlation between the audit partner tenure and the level of the discretionary accruals. Negative correlation between the audit firm tenure and the level of the discretionary accruals, after controlling for partner tenure. Methodology Two proxies are used for measuring the earnings quality, current accruals and discretionary accruals. Both univariate and multivariate tests are performed for testing the hypotheses. Discretionary accruals are measured using a version of the modified Jones model. Two hypotheses are tested, one regarding the effect of partner tenure, and one regarding the effect of audit firm tenure, after controlling for the partner tenure. Models are designed for testing these hypotheses, including the age of the company, its size and growth, as variables. Data sources Compustat database. Taiwan Economic Journal (TEJ) database Sample 42.302 firm year observations from the US from the period 888 Taiwanese companies from the period with a total of 5.213 firm year observations. Items that have an initial public offering in the current or previous year are excluded from the sample. Subject The effect of the relationship in terms of tenure on the quality of earnings. The effect of audit firm tenure on the quality of the published earnings.