Impact of External Audit Quality on Earnings Management in Marine Enterprises

Abstract

Lin, C.; Wang, X., and Chen, Y., 2019. Impact of external audit quality on earnings management in marine enterprises. In: Li, L.; Wan, X., and Huang, X. (eds.), Recent Developments in Practices and Research on Coastal Regions: Transportation, Environment and Economy. Journal of Coastal Research, Special Issue No. 98, pp. XX-XX. Journal of Coastal Research, Special Issue No. 98, pp. 100–103. Coconut Creek (Florida), ISSN 0749-0208.With the rapid increase of marine resources and foreign trade, marine enterprises have shown a tendency to expand. Corporate management may whitewash its performance through earnings management, which is not conducive to the long-term development of marine enterprises. As third-party institutions, external audit can be used as an alternative to the internal control of marine enterprises to curb the earnings management of marine enterprises. Using marine enterprises as an example, this article aims to explore the effect of external audit quality on corporate earnings management. The results show that an external audit has an inhibitory effect on earnings management, which is mainly related to the quality of the external audit; the marine companies with high external audit quality have a stronger inhibitory effect on earnings management, and there is a more significant negative correlation between earnings management of high-quality audit teams and the fulfillment of social responsibility. The research findings provide a theoretical basis for exploring the relationship between external audit quality and earnings management.