Abstract
The main purpose of this research is to determine the link between internal auditing quality and earnings management in Omani companies. In this research, a sample size of 80 was designated from two sectors (Industrial, and Service) in Muscat Securities Market (MSM) in Sultanate of Oman. The secondary data collected is examined with Smart PLS 3.0. The findings of the research show a positive link between Internal audit quality and earnings management in both sectors (industrial and service). This finding indicates that the increase in audit quality will affect to enhance and improve the earning management in Omani listed firms.
Highlights
Earnings management findings from an estimate in financial reporting with the intent of either deceptive stakeholders about a firm’s profitability or may affect contractual outcomes that are based on accounting numbers (Putra, & FitoMela, 2019)
A variable which is the endogenous show to have R2 value 0.278, 0.210 earning management suggesting that 27%, 21% of the variance in earning management can be explained by the predictors:
The findings showed that audit committee size negative with the significant earning management where it was P
Summary
Earnings management findings from an estimate in financial reporting with the intent of either deceptive stakeholders about a firm’s profitability or may affect contractual outcomes that are based on accounting numbers (Putra, & FitoMela, 2019). Earnings management leads to a higher necessity for auditors. The auditor should have labored high-quality management to minimize deceptive income (Alabdullah, & Ahmed, 2020; Flayyih et al, 2018). Poor management of earnings leads to loss of credibility of stakeholders or organization owners, and this leads to poor outcomes such as loss of confidence (Flayyih et al, 2018)
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