Siti Aishah Mat, Norazida Mohamed, Kamaruzzaman Muhammad, Erlane K Ghani, Mazurina Mohd Ali
This study presents an evidence on the importance of auditor’s reputation, auditor’s fee and auditor’s scepticism to the quality of auditing earnings management. Using auditors from the Big 4 and non-Big 4 audit firms, a study was conducted to examine whether these characteristics of the auditors influence their audit quality on earnings management. The study was carried out using a questionnaire survey. The findings of the study suggest that auditor’s reputation and auditor’s fee do not necessary influence the quality of audit on earnings management. Rather, the auditor’s scepticism plays an important role in influencing the quality of audit on earnings management. The study implicates that auditors should have greater scepticism to gain better audit quality in auditing earnings management practices. The evidence provided in this study could help enforcement bodies such as SEC in probing companies that manipulate their earnings reflected in their financial statement.