Relationship Between the Audit Committee and Earning Management in Listed Companies in Vietnam

• Published in: The Journal of Asian finance, economics, and business Vol. 8; no. 2; pp. 135 - 142
• Main Authors: NGO, Diem Nhat Phuong, LE, Anh Thi Hong
• Format: Journal Article
• Language: Korean
• Published: 한국유통과학회 28.02.2021; Korea Distribution Science Association
• Subjects: Vietnam; Listed Companies; Audit Committee; Earnings Management
• ISSN: 2288-4637; 2288-4645

This study aims to examine the impact of audit committee characteristics on income management of companies listed on the Stock Exchange of Vietnam. Research data was collected from all 745 listed companies on Vietnam's stock market over four years, from 2015 to 2018. After excluding companies that did not qualify, there were 216 companies with 864 observations. With the help of dedicated software Stata 15, the impact of audit committee characteristics (through independent variables and control variables such as Audit Committee Independence, Auditing Committee size, Auditing Committee Expertise, Auditing Committee Meeting Frequency, Company Size, Financial Leverage, and Operating Cash Flow) to earning management through a multivariate regression model was determined. Research results from Vietnamese listed companies during this period show that the size and expertise of the audit committee are inversely related to the discretionary accruals representing earning management. At the same time, the research results also identify a positive relationship between firm size and earning management, and the inverse relationship between financial leverage, net cash flow from operating operations and earning management. However, the multivariate regression results do not find clear evidence of a relationship between audit committee independence and the audit committee meeting frequency to earning management.