Manuel Orta Pérez

Audit committee and internal audit and the quality of earnings: empirical evidence from Spanish companies

Corporate scandals and failures such as Enron, WorldCom, etc. were highly catastrophic and had a terrible effect on stakeholders. The pressure of globalisation and the intense competition have lead to organisations encouraging good corporate governance. Organisations have to promote transparency and accountability of financial information. As Gramling et al. (J Account Lit 23:194–244, 2004) argued there are four important mechanisms of corporate governance include boards of directors, audit committees (among others) and internal and external audit functions. However, this paper will focus on the relationship between two corporate governance mechanisms (audit committee and internal audit function). Thus, our purpose is to analyse the relation between characteristics of the audit committee and internal audit function and earnings management measured as abnormal accruals to test the quality of financial statements. We hypothesise that the association between the effectiveness of the audit committee and the presence of an internal audit function and its relationship with this committee would indicate less opportunity for management to manipulate earnings. Using a sample of 108 non-financial Spanish companies that traded on the Madrid Stock Exchange between 2003 and 2006 (432 observations), we have found that the size and number of meetings of the audit committee had a significant negative association with earnings manipulations. Also, our results suggest that a negative relation between having an internal audit function and earnings management.

La experiencia y el comportamiento ético de los Auditores: un Estudio Empírico

RESUMEN El desarrollo de la profesión de auditoría conlleva situaciones en las que el auditor se enfrenta a dilemas de carácter ético. Su comportamiento para obtener una solución a los mismos requiere la utilización de un proceso de toma de decisiones donde adquieren especial importancia los valores éticos individuales. En un estudio anterior abordamos el análisis de la ponderación que los auditores españoles establecen de determinados factores que son considerados predictores de comportamiento ético. Asimismo, valoramos la influencia en el proceso de toma de decisiones ante dichos dilemas éticos, de otras variables personales del auditor. En concreto, estudiamos cuatro variables demográficas claves en esta relación: edad, género y experiencia profesional. En el presente trabajo abordamos el estudio desde otra perspectiva: la de los auditores noveles. El objetivo es establecer comparaciones con los resultados obtenidos con los expertos y con objeto de intentar llegar a conclusiones con relación a la influencia de la experiencia adquirida con el paso del tiempo en la ponderación de los citados factores.