Auditor industry specialization and cost of equity on earnings management: the moderating role of institutional ownership Arash Arianpoor Primary Author Najmeh Farzaneh Additional Author mixed material bibliography ENGLAND EMERALD INSIGHT 2023 monographic id INDONESIA

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BAIK Abstract Purpose – This study aims to explore the moderating role of institutional ownership in the impact of auditor industry specialization and the cost of equity on earnings management in Tehran Stock Exchange. Design/methodology/approach – A total number of 198 firms were assessed in this study from 2014 to 2021. In this study, both accrual earning management (AEM) and real earnings management (REM) have been included. The industry-adjusted earnings price ratio and Gordon Growth Model were used for the cost of equity capital. In addition, auditor’s within-industry market share was used as a proxy for auditor industry specialization. Findings – The results showed that institutional ownership positively moderates the impact of auditor industry specialization on AEM/REM. Furthermore, institutional ownership positively moderates the impact of cost of equity on AEM/REM. Hypothesis testing based on a robust regression and t þ 1 test were also used for the results. Originality/value – Previous studies have reported mixed results of this empirical question whether institutional ownership actually monitors managers and control earning management, considering the auditor industry specialization and the cost of equity. To the best of authors’ knowledge, this is a pioneering study to fill the existing gap. This study would not only benefit companies to manage financial and strategic decisions more efficiently but also help national and international society apply effective mechanisms to assist companies in decreasing earning management and increasing the firm performance, and try to push the market into a favorable direction. Real earnings management Accrual earnings management Cost of equity, Institutional ownership Auditor industry specialization NONE Repository Universitas Langlangbuana Sistem Repository Elektronik Skripsi, Tesis, Desertasi dan Penelitian Dosen Universitas Langlangbuana JA101.IJLMA23V65.2.2 My Library Auditor industry specialization and cost of equity on earnings management: the moderating role of institutional ownership COVER_International_Journal_of_Law_and_Management.png.png 2719 2023-12-22 10:32:16 2023-12-22 10:32:39 machine generated