The influence of audit committee attributes on earnings management: Evidence from listed insurance firms

Abstract

This job aims to confirm the role of audit committee (AC) attributes in curbing earnings management (EM) (discretionary accruals, DA). More significantly, it seeks to fully explore the moderating impact of audit quality (AQ) (Big4 companies) on the association of AC attributes with DA. The research subject is data from insurance businesses listed on the Saudi Stock Exchange (Tadawul) over an eight-year period (2014–2021). The data analyses from this period show that AC size, commitment, meetings, and independence negatively and significantly influence DA. However, AC experience was not linked to DA. The impact of moderating variables was also explored. AQ has a significant and negative moderating influence on the association of audit committee size (ACZ) with DA. Furthermore, the regression outcomes confirm that AQ does not affect the association of DA with other AC attributes. These findings can help investors and shareholders evaluate the trustworthiness and quality of annual reporting when deciding whether to invest in companies listed on Tadawul. They can also help Saudi policymakers develop and strengthen laws and regulations to assist and encourage firms’ production of reliable, quality financial statements.