AUDIT PARTNER TENURE DAN AUDIT FIRM TENURE TERHADAP EARNINGS MANAGEMENT PADA PERUSAHAAN MANUFAKTUR

Nata, Sisylia

Jurnal Akuntansi Kontemporer
Vol. 2 No. 2 (2010)

Conflicts of interest arose between stakeholder trigged management to do earnings management. Auditor has to assess the fairness of the financial statements containing earnings management. The length of an auditor and a public accountant firm audited a company are feared to reduce auditors' independence, objectivity, and professional skepticism so that earnings management increases. On the other hand, understanding clients' business better enables auditor to detect earnings management. Data analysis was performed with multiple regression analysis. The analysis result indicates that the longer audit partner tenure and audit firm tenure, earnings management decreases, because the better their understanding of the clients' business.