This study examines the interaction of audit firm characteristics with two core earnings management tools: classification shifting (CS) and core accruals management (CACM). CS occurs when management intentionally misclassifies recurring operational expenses as special items to inflate perceptions of core earnings. A Norwegian sample of companies, with forthcoming equity issues and acquisitions, reveals that CS substitutes for CACM for clients of Big 4 and industry‐specialized audit firms. By contrast, CS complements CACM for clients of non‐Big 4 and non‐specialized audit firms. The level of auditor‐provided non‐audit services during a forthcoming equity issue, a measure of economic bond potential, also interacts with CS and CACM, though this interaction is different for clients of Big 4 and non‐Big 4 audit firms. The overall results suggest that auditor incentives may support tolerating CS, which raises a question about the effectiveness of current accounting and auditing standards.

中文翻译：

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核心收益管理：审计公司如何与分类转移和应计管理进行交互？

这项研究考察了审计公司特征与两个核心收益管理工具的相互作用：分类转换（CS）和核心应计管理（CACM）。当管理层有意将经常性运营费用错误归类为特殊项目以夸大对核心收益的认知时，就会出现CS。挪威公司的样本，以及即将发行的股票和并购，显示出CS替代了CACM，从而取代了四大巨头和行业专业审计公司的客户。相比之下，CS为非四大和非专业审计公司的客户补充了CACM。在即将发行的股票发行中，由审计师提供的非审计服务的水平（衡量经济债券的潜力）也与CS和CACM相互影响，尽管对于四大和四大审计公司的客户而言，这种相互作用是不同的。