The Relationship between Auditor Characteristics and Earnings Management: An Empirical Study on Taiwanese Nonprofit Hospitals ()
ABSTRACT
Previous studies have focused on researching
earnings management behavior in nonprofit hospitals in theUnited Kingdomand theUnited States. However, the
operational system and environment of hospitals inTaiwanare substantially different
from the cases studied, and therefore cannot be considered equivalent. The
objective of this study was to determine whether earnings management is
practiced in NFP hospitals inTaiwanand to analyze their earnings management behavior. The ordinary least square
method was used to examine the relationships inTaiwan’s nonprofit hospitals.
Alternative procedures, such as the abnormal bad debt, abnormal non-operating
or non-revenue generating activity expenditure, and abnormal net gain on the
sale of property models were also developed and tested to measure abnormal real
items. Research has indicated that auditor specialization and auditor tenure
have a negative relationship with earnings management. The empirical results
also showed that the abnormal net gain on the sale of property is ideal for
evaluating earnings management inTaiwan’s nonprofit hospitals.
Share and Cite:
Li, X. and Liu, Z. (2019) The Relationship between Auditor Characteristics and Earnings Management: An Empirical Study on Taiwanese Nonprofit Hospitals.
Modern Economy,
10, 2335-2343. doi:
10.4236/me.2019.1012146.
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