Purpose

This paper aims to examine whether African banks audited by a Big 4 auditor use loan loss provisions (LLPs) for earnings management purposes before, during and after the global financial crisis. It focuses on income smoothing as a type of earnings management.

Design/methodology/approach

The study analyzed banks in 21 African countries from 2002 to 2014. The estimation techniques used are the fixed effect regression technique, descriptive statistic and Pearson correlation statistic. The model used in the study expresses LLPs as a function of its discretionary and non-discretionary determinants.

Findings

African banks audited by Big 4 auditors use LLPs to smooth income and the incentive to smooth income is greater during an economic downturn or recession. Also, African banks audited by a Big 4 auditor use income smoothing to lower high earnings during the financial crisis and in the pre-financial crisis period but not in the post-financial crisis period.

Originality/value

The literature shows that the presence of Big 4 auditors improves earnings quality. The direct impact of Big 4 auditors on earnings management in African banks has received little attention in the literature, and the impact of audit quality on bank earnings smoothing particularly in Africa is yet to be known.

中文翻译：

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四大审计师、银行盈余管理和非洲金融危机

目的

本文旨在研究由四大审计师审计的非洲银行是否在全球金融危机之前、期间和之后将贷款损失准备金 (LLP) 用于盈余管理。它侧重于将收入平滑作为一种盈余管理。

设计/方法/方法

该研究分析了 2002 年至 2014 年 21 个非洲国家的银行。使用的估计技术是固定效应回归技术、描述性统计和 Pearson 相关统计。研究中使用的模型将 LLP 表示为其可自由裁量和非可自由裁量决定因素的函数。

发现

由四大审计师审计的非洲银行使用 LLP 来平滑收入，在经济低迷或衰退期间，平滑收入的动机更大。此外，由四大审计师审计的非洲银行在金融危机期间和金融危机前时期使用收入平滑来降低高收益，但在金融危机后时期则没有。

原创性/价值

文献表明，四大审计师的存在提高了盈利质量。四大审计师对非洲银行盈余管理的直接影响在文献中很少受到关注，而审计质量对银行盈余平滑的影响尤其是在非洲尚不清楚。