The Role Of Auditor in Limitation Of The Phenomenon Of Earnings Management In Companies

Abstract

The research dealt with discovering the relationship between the auditor and earnings management and knowing the auditor’s ability to limit earnings management practices in companies, given that these companies manage their profits. Although the financial statements are prepared in accordance with financial accounting standards, these standards may be exploited by some accountants by using creative practices to address financial events. The research concluded with a set of conclusions, the most important of which is that the auditor profession aims to provide services to many parties that benefit from the financial statements, including current and prospective investors. Those who are interested in obtaining honest information that reflects the true financial situation of the company. One of the most important recommendations recommended by the researcher was the need for professional organizations to pay attention to evaluating the impact of earnings management practices, including the formation of allocations that affect the credibility of the financial statements.