Creative Commons

This dissertation was written as part of the MSc in Accounting, Auditing and Financial Management at the International Hellenic University. In this research I examine the relationship between auditor tenure, audit rotation and earnings management through accruals manipulations in the era after the implementation of the Sarbanes-Oxley (S0X) act of 2002 and until the year of 2019. A variation of the cross-sectional modified Jones model as proposed by Kothari et al. (2005) is being used in order to determine the discretionary accruals which will be the proxy I am using for earnings management and I will examine the relationship between earnings management and auditor changes as well as the auditor tenure. My two hypothesis presented in this research are that short-term audit tenure is associated with higher absolute level of discretionary accruals comparing to medium and long audit tenure and that earnings management is increased the year before and after an auditor change takes place. I reject both my hypothesis, implying that for my sample of firms I examined audit tenure and audit rotation does not affect the level of earnings management as measured by the absolute value of the discretionary accruals. This research was conducted under the valuable supervision of Professor Alexandros Sikalidis and was made possible with the source access provided by the International Hellenic University.