Earnings Cosmetics and Auditor Gender: Evidence from Finnish Private Firms

19 Pages Posted: 5 Mar 2011

See all articles by Jyrki Niskanen

Jyrki Niskanen

University of Eastern Finland

Jukka Karjalainen

University of Eastern Finland - Business School

Jussi Karjalainen

affiliation not provided to SSRN

Mervi Niskanen

University of Eastern Finland

Date Written: March 1, 2011

Abstract

This paper investigates whether there are differences in cosmetic earnings management between firms audited by male vs. female auditors. A number of previous studies have documented that listed firms around the world engage in cosmetic earnings management. This paper is the first one to document such behavior in private SMEs. Our results indicate that auditor gender makes a difference in earnings cosmetics. We find that earnings cosmetics is more likely to appear in firms audited by male auditors, suggesting that gender diversity in auditing may help increase audit quality.

Keywords: Earnings Cosmetics, Auditor, Gender

JEL Classification: M40

Suggested Citation

Niskanen, Jyrki and Karjalainen, Jukka and Karjalainen, Jussi and Niskanen, Mervi, Earnings Cosmetics and Auditor Gender: Evidence from Finnish Private Firms (March 1, 2011). Available at SSRN: https://ssrn.com/abstract=1773623 or http://dx.doi.org/10.2139/ssrn.1773623

Jyrki Niskanen

University of Eastern Finland

PO Box 111
Joensuu, 80100
Finland

Jukka Karjalainen (Contact Author)

University of Eastern Finland - Business School ( email )

P.O. Box 1627
Kuopio, FI-70211
Finland

Jussi Karjalainen

affiliation not provided to SSRN ( email )

Mervi Niskanen

University of Eastern Finland ( email )

PL 1627
Kuopio, 70211
Finland

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