(October University of Modern Sciences and Arts, 2019) Metwally, Adham; Maged, Marley; Wagdy, Mirna; Tarek, Salah
Purpose – This paper aims to examine the effect of IFRS adoption and audit quality on earnings management .specially this study examine whether earnings management has a negative impact on both IFRS adoption and audit quality for a sample of firms listed on Saudi Arabia and Kuwait stock exchange.
Design/methodology/approach – the sample was 14 listed companies in Saudi Arabia and Kuwait stock exchange on the industrial material sector during the period "2014-2018". It measures the earnings management by modified Johns model, while the audit quality is measured by dummy variable as well as IFRS adoption. The data analyzed by descriptive correlation and regression analysis using statistical program called SPSS.
Findings –We found that there is a negative relationship between audit quality and earnings management and a negative relationship between IFRS adoption and earnings management we have accepted this hypothesis after some statistical analysis are implemented.
Limitations – Collecting variable’s data, complexity of calculation, access to information, the small sample size, language barrier, limitation of time.
