Audit quality effectiveness on the relationship between board dynamics and earnings management

Abstract

This study aims to extend the existing body of literature by investigating whether audit quality interacts with board dynamics and earnings management. This research makes use of information obtained from 205 companies that are publicly traded in Sub-Sahara Africa (Nigeria, Ghana and South Africa) Stoch Exchange for the period spanning from 2013 to 2022. The fixed and random effect estimation model was utilized in the research study to account for the implications. The findings indicate a positive and statistically significant link was discovered between board dynamics (CEOAI, BPRCI) and EM, and also, demonstrated that audit quality played a moderating role in the connection between CEO attributes and the board process. The results of this study will give shareholders and regulators information that will help analyze board dynamics that are beneficial in mitigating earnings management practices from a growing region. This study contributes to the existing body of literature by conducting an empirical investigation of the subject matter within the Sub-Sahara Africa region. In addition, the study fills the gap in the current body of literature by investigating whether or not audit quality acts as a moderator in the connection between board dynamics and EM.