Purpose

The authors examine the impact of audit quality (AQ) on classification shifting (CS) among non-financial firms operating in the UK and Germany.

Design/methodology/approach

This paper used various audit committee variables (size, meetings, gender diversity and financial expertise) to measure AQ and its impact on CS. The authors used a total of 2,110 firm-year observations from 2010 to 2019.

Findings

The authors found that the presence of female members on the audit committee and audit committee financial expertise deter the UK and German managers from shifting core expenses and revenue items into special items to inflate core earnings. However, audit committee size is positively related to CS among German firms but has no impact on UK firms. The authors also document evidence that audit committee meetings restrain UK managers from engaging in CS. However, the authors found no impact on CS among German firms. The study results hold even after employing several tests.

Research limitations/implications

Overall, the study findings provide broad support in an international setting for the board to improve its auditing practices and offer essential information to investors to assess how AQ affects the financial reporting process.

Originality/value

Most CS studies used market-oriented economies such as the USA and UK and ignored bank-based economies such as Germany, France and Japan. The authors provide a comparison among bank and market-oriented economies on whether the AQ has a similar impact on CS or not among them.

中文翻译：

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审计质量和分类转变：来自英国和德国的证据

目的

作者研究了审计质量 (AQ) 对在英国和德国运营的非金融公司分类转变 (CS) 的影响。

设计/方法论/途径

本文使用各种审计委员会变量（规模、会议、性别多样性和财务专业知识）来衡量 AQ 及其对 CS 的影响。作者总共使用了 2010 年至 2019 年的 2,110 个公司年度观察结果。

发现

作者发现，审计委员会中女性成员的存在以及审计委员会的财务专业知识阻止了英国和德国的管理者将核心支出和收入项目转移到特殊项目以夸大核心收益。然而，审计委员会规模与德国公司的企业社会责任呈正相关，但对英国公司没有影响。作者还记录了审计委员会会议限制英国经理参与 CS 的证据。然而，作者发现德国企业的客户满意度没有受到影响。即使在进行了多次测试之后，该研究结果仍然成立。

研究局限性/影响

总体而言，研究结果在国际环境下为董事会改进其审计实践提供了广泛支持，并为投资者提供了评估 AQ 如何影响财务报告流程的重要信息。

原创性/价值

大多数CS研究都使用美国和英国等市场导向型经济体，而忽略了德国、法国和日本等银行主导型经济体。作者对银行经济体和市场经济体进行了比较，看看 AQ 是否对 CS 具有类似的影响。