The role of audit quality in limiting Earnings Management in private banks listed at damascuse securities exchange

Abstract

This research aims to clarify the importance and role of audit quality in limiting earnings management at private banks listed at Damascus Securities Exchange for the period from 2010 to 2020. The audit index was built on the basis of governance reports issued by the Syrian Securities and Financial Markets Authority in addition to the banks’ annual reports. Earnings management was measured using the Loan Loss Provision (LLP) model. This study applies multiple linear regression analysis in order to examine the impact of audit provisions on earnings management.

The results indicate that there is a negative and significant impact    for  audit  index on earnings management at the 5 percent level of significance. It is also found that there is a negative and significant impact of audit provisions related to the existence of an committee with the fulfillment of its conditions and the provision related to the fact that the external auditor is from the big4 , and the provision related to the necessity for a member of the committee to have financial and accounting experience on earnings management.