Objective - This study examines whether the experience and gender of auditors in Big4 firm in relationship of deterring Real Earnings Management (REM).Different from the majority of previous studies, this study focuses on auditors in Big4 audit firms and real earnings management within Malaysian business environment. Big4 audit firms are associated with high quality audit because of the reputation to uphold, thusadopted stringent quality control and assurance approach, systems and procedures. Once adopted, the effect of individual characteristics may become less important. Thus, it is questionable whether individual characteristics such as auditor experience and gender could still have an influence on the outcomes of an audit, in this case, REM, when the audit firms are Big 4 (assuming very stringent quality control procedures are adopted).

Methodology/Technique - This study substantiates prior literatureand conducted tests only on companies audited by Big4 audit firms.We also find that auditor experiences confirms to Agency Theory where REM reduces when the experience increases.Data was obtained from the Companies Commission of Malaysia (SSM), DataStream and Bursa Malaysia.

Findings - The result confirms prior literature that auditor experience isstillanimportant factor that can limit REM, even in companies audited by the Big4 firms. The results howeverreveal that Big4 female auditors do not have any significant effect in reducing REM.

Novelty - Although female auditors are claimed by Gender Socialization Theory, to have better moral judgments than male auditors, the result shows both genders are equal, at least in limiting REM.

Type of Paper - Empirical.

Keywords: Big4 Auditors; Auditor Experience; Real Earnings Management;Auditor Gender; Bursa Malaysia

JEL Classification: M40; M41; M42

URI: http://gatrenterprise.com/GATRJournals/AFR/vol6.3_4.html

DOI: https://doi.org/10.35609/afr.2021.6.3(4)

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