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Open research questions in Auditing, Earnings Management, Governance

130 unresolved questions extracted from the limitations and future-work sections of 3,324 Auditing, Earnings Management, Governance papers in our library. Each links back to the study that raised it.

What the literature leaves open

  • Future Research: Future research is recommended to expand the database coverage and publication period, and to explore new factors, such as digital transformation, sustainability, audit quality, and artificial intelligence in financial reporting, that may influence earnings management practices.

    Mapping the Research Landscape of Factors Affecting Earnings Management: A Bibliometric Study · 2026 · DOI

  • In particular, uncertainties in the valuation of non-monetary assets, deviations in depreciation calculations, a lack of standards across different accounting systems, and high implementation costs are among the fundamental problems hindering the institutionalization of inflation accounting in Türkiye.

    Assessing Inflation Accounting Practices in Türkiye: Structural Challenges and Strategic Proposals · 2026 · DOI

  • However, Lennox, Wu and Zhang (2014) found limited evidence of audit quality improvements following mandatory rotation in China, with some indicators suggesting temporary deterioration during transition periods.

    Empirical Determination of Optimal Audit Firm Tenure: An Examination of Non-Linear Relationships in Listed Companies in Borsa İstanbul · 2026 · DOI

  • Internal auditors should pursue continuous professional development in fraud detection, risk management and IT auditing to enhance their practices and effectiveness. Strengthening the Audit Committee, ensuring auditors independence from political pressure, and investing in advanced IT systems may improve audit quality and governance. Additionally, public sector organisations should enhance transparency and accountability in their auditing procedures.

    Internal Audit Practices and Their Effectiveness in Local Government: A Comparative Sector Analysis using a systematic review · 2026 · DOI

  • Future research could examine the long-term impact of internal auditing on organisational performance and public sector accountability. Studies on digital tools, governance structure and external factors such as political stability and economic conditional may provide insights into audit effectiveness. Additionally, evaluation of training and professional development programs could enhance audit quality and overall organisational performance.

    Internal Audit Practices and Their Effectiveness in Local Government: A Comparative Sector Analysis using a systematic review · 2026 · DOI

  • The review identifies three underexplored areas warranting future research: the interaction between IFRS adoption and earnings management in emerging markets, the role of artificial intelligence in both enabling and detecting manipulation, and the long-term consequences of real activities manipulation for firm innovation and sustainability.

    Earnings Management and Financial Reporting Quality: A Systematic Literature Review of Mechanisms, Determinants, and Consequences (2000 to 2024) · 2026 · DOI

  • This study is not free from limitations. Although we resort to two of the most widely accepted models to estimate discretionary accruals, there are some alternative models that could be applied in future research to confirm the robustness of the presented results. For example, Dechow and Dichev (2002) developed the modified Jones model proposed by Dechow et al. (1995) to consider the relation between current period working capital accruals and operating cash flows in the prior, current and future periods, while Kothari et al. (2005), developed the same model to capture the impact of performance on discretionary accruals. Moreover, earnings can be managed through real activities, which can be a complement or a substitute for AEM. The economic context, institutional factors and the companies’ industry characteristics influence such a decision. For example, managers tend to choose REM in countries where the legal environment constrains AEM, i.e., countries with stronger investor protection (Enomoto et al., 2015; Leuz et al., 2003), while the hotel industry, which is intensive in fixed assets, provides managers with an opportunity to manage earnings through AEM (Jiao and Lu, 2019). Nevertheless, there is a lack of evidence on how the EM behaviour of hotel managers is affected when facing negative external shocks that reduce tourism demand (Henseler et al., 2022; Mwamwaja and Mlozi, 2020; Seetah, 2017). Therefore, to mitigate this limitation, further research could explore the presence of REM, namely through the Roychowdhury’s (2006) model, which uses several proxies for estimating abnormal levels 12 Tourism and Hospitality Research 0(0) of cash flow from operations, abnormal levels of production costs and discretionary expenses, to explore the effect of the simultaneous practice of intentional operating decisions to manage earnings. A further limitation relates to the existence of unobserved intrinsic characteristics of companies, such as the profile of the manager, namely their propensity to take management risks, or access to unconventional credit lines. In fact, such unobserved characteristics the companies may explain the EM behaviour of studied and vice versa, raising questions of endogeneity. To mitigate this concern, robustness tests could be carried out in future research to validate the results. information, An additional limitation of this study is the fact that it has only considered unlisted Portuguese firms, which disclose limited financial justifying the sample’s length. Given the specific characteristics of this country, namely the high economic and social dependence on tourism activity, the results of this research should be generalised with caution. Furthermore, Portugal’s institutional or sectoral specifics, for instance, whether the small-firm structure or government support schemes, might have affected the incentives for EM. For future investigation, we suggest studying a group of European countries with strong tourism activity (e.g., Italy, Greece, Spain) in order to ascertain whether countries with identical characteristics exhibit a similar EM behaviour or whether this is a country-specific effect. Also, considering that the COVID-19 pandemic has changed the dynamics of the tourism sector and tested the resilience levels of its participating companies, it would be interesting to understand whether the hotel sub-sector changed its behaviour after the recovery and extend this analysis to other tourism sub-sectors. Finally, it would also be relevant to explore different industries to ascertain whether non-touristic sectors reacted similarly.

    Can sudden fluctuations in tourism demand influence the earnings management practices of the hotel industry? Evidence from Portugal · 2026 · DOI

  • Furthermore, the institutional setting in Taiwan (the system of audit committee is intro- duced later in 2006 after the first introduction of independent director system) enables us to isolate the influence of independent directors from audit committees, which is rarely explored in the literature.

    The advisory and monitoring functions of independent directors on audit quality in firms without audit committee · 2026 · DOI

  • This distinction between symbolic and substantive adoption, rooted in the institution- al theory concept of decoupling (Meyer & Rowan, 1977), is critical for interpreting the Vietnamese evi- dence and for resolving the mixed findings reported across prior emerging market studies. Importantly, the findings demonstrate that AC pres- ence alone is insufficient to drive reporting improve- ments.

    Audit committee and financial reporting quality in an emerging market: Evidence from regulatory reform in Vietnam · 2026 · DOI

  • While the voluntary and mandatory adoption of IFRS has been examined extensively, research on the voluntary switch from IFRS back to local accounting standards is sparse.

    Analysts’ Information Environment and Voluntary Turn Away from IFRS: A Discussion · 2026 · DOI

  • As the regulatory cost of RPT rises toward this threshold, the model predicts an accel- erating shift toward the compensation channel, implying convex dynamics in the substitution response that could be explored empirically with longer post-treatment windows.

    Plugging One Leak, Springing Another: Tax Enforcement and the Unintended Rise of Within-Firm Inequality · 2026 · DOI

  • Future studies should investigate how to use things like ChatGPT responsibly and in a way that respects privacy to examine complicated information - things such as legal agreements, or what was said in meetings - to find proof for our audits. Future studies should explore what laws are needed to figure out who is to blame when a fully independent AI agent, working without a human looking over its shoulder, makes a major error in a financial report. The limitations of this study are that, for a start, AEGIS is currently just an idea and has not been used in real businesses or by smaller auditing companies, which may not be able to afford the more advanced AI it requires.

    Auditing Artificial Intelligence-Driven Financial Systems: Accountability, Transparency, and Auditor Liability in Algorithm-Based Decision Making · 2026 · DOI

  • Moreover, future research may consider re-examining the existing relationships across longer periods, considering bankruptcy risks when testing the effect of EM on the relationship between RT and firm value. Finally, future studies may consider investigating the effects of macro-economic variables , such as economic policy uncertainty and geopolitical risks, on the relationship between RT and firm value.

    The relationship between risk-taking and firm value: does earnings management matter? Evidence from an emerging context · 2026 · DOI

  • Based on the evidence presented, the following actionable recommendations are offered to distinct stakeholder groups: 7.1 For the Financial Reporting Council of Nigeria (FRCN) The FRCN should consider amending auditor quality guidelines to explicitly include industry specialization among the criteria to be evaluated during audit firm registration and periodic quality review. Specifically, the FRCN should require audit firms to publicly disclose their industry engagement concentration metrics annually, enabling audit committees and market participants to assess the depth of sectoral expertise. This is consistent with the IAASB's recent emphasis on audit firm transparency in quality disclosures. 7.2 For the Securities and Exchange Commission (SEC) Nigeria The SEC should revise the Corporate Governance Code to require audit committees of listed firms to document their consideration of auditor industry expertise — not merely auditor independence and fees — in the annual audit committee report. This would create a disclosure incentive for boards to prioritise specialization in auditor selection, aligning audit procurement practices with the evidence on earnings management reduction. 7.3 For the Nigerian Exchange Group (NGX) The NGX should incorporate auditor specialization data — derived from publicly available audit engagement disclosures — into its financial disclosure database to facilitate investor access and research. Institutional investors and analysts should incorporate auditor specialization scores into their financial quality screening models as a forward-looking indicator of earnings reliability. 7.4 For Audit Firms Audit firms — both Big 4 affiliates and national firms — should invest strategically in sector-specific audit teams, industry training programmes, and proprietary benchmarking databases that enable their auditors to identify and challenge unusual accruals more effectively than generalist practitioners. The evidence suggests that these investments translate into identifiable quality differentials that support both reputational positioning and the social value of auditing. 7.5 For Corporate Boards and Audit Committees Boards and audit committees should treat auditor selection as a governance priority rather than a compliance formality. The evidence that specialist auditors independently constrain earnings management — beyond what is achieved by Big 4 affiliation or board independence alone — underscores the strategic value of expertise-conscious auditor procurement. Audit committees should formalise assessment criteria that include industry specialization, sector-specific methodology, and the proportion of engagement team hours allocated to individuals with documented sector expertise.

    Audit Quality and Earnings Management: Effect of Auditor Industry Specialization in Nigeria · 2026 · DOI

  • Future studies may explore alternative methods to measure REM. Future research could examine REM and AEM jointly or develop integrated measures to better capture overall earnings management behavior. An important limitation of this study is its primary reliance on REM as the main proxy for earnings management. Moreover, the study could be replicated in countries with more formal relationships between executives.

    Mutual tenure and real earnings management · 2026 · DOI

  • Limitations and Future Research Agenda While this systematic review establishes a strong conceptual and theoretical foundation for RBA-ESG integration, it is limited by the current literature's is predominantly conceptual or nature, which ESG exploratory due to the relatively recent emergence of mandatory proposed assurance.

    THE RBA EVOLUTION: A SYSTEMATIC REVIEW OF RISK-BASED AUDITING'S ROLE IN ENHANCING THE CREDIBILITY AND ASSURANCE OF CORPORATE SUSTAINABILITY (ESG) DISCLOSURES · 2026 · DOI

  • Based on the findings of this study, the following actionable recommendations are offered: 1. Nigerian audit firms should develop phased AI adoption roadmaps that align technology investments with corresponding investments in auditor training and data quality improvement. The evidence is clear that AI adoption without human capital development yields suboptimal results. 2. The FRCN should incorporate AI readiness assessments into its practice review framework, evaluating not only whether firms use AI tools but whether they have adequate governance structures, training programs, and data quality controls to support effective AI deployment. 3. ICAN should expand its Mandatory Continuing Professional Development (MCPD) requirements to include minimum hours in data analytics, machine learning fundamentals, and AI-augmented audit methodology. The strong effect of auditor expertise in this study suggests that training is a critical bottleneck. 4. Audit firms should establish data governance protocols that ensure the completeness, accuracy, timeliness, and consistency of data inputs before deploying AI tools. The significant effect of data quality underscores the risks of applying sophisticated analytical tools to unreliable data. 5. The Federal Government of Nigeria should prioritize digital infrastructure investments— including reliable power supply, affordable broadband, and cybersecurity frameworks—that enable professional services firms to deploy technology effectively. The significant coefficient on technological infrastructure connects audit quality to the broader digital infrastructure agenda. 6. Mid-tier and smaller audit firms should explore collaborative approaches to AI adoption, including shared technology platforms, joint training programs, and industry consortia that reduce the per-firm cost of AI implementation. The significant firm size effect suggests that smaller firms face disadvantages that collective action could help mitigate. 7. Future regulatory standards should address AI-specific risks in auditing, including algorithmic bias, over-reliance on automated outputs, and the need for human oversight of AI- generated findings. The positive coefficient on regulatory compliance suggests that well- designed standards enhance rather than constrain quality.

    Artificial intelligence adoption and audit quality in Nigerian audit firms · 2026 · DOI

  • auditing process." Qualitative Research in Accounting & Management 19.3 (2022): 255-285. complex the in 64. Valentine, S. "Impoverished algorithms: Misguided governments, flawed technologies, and social control." Fordham Urb. LJ 46 (2019): 364. 65. Van Duc, N., Chau, T. T. M., Long, P. H., Nhung, L. T. C., Huy, B. Q., Bin, Z., & Yusof, A. F. B. H.

    AI Audit Analytics for Strengthening Fraud Detection in Governmental and Nonprofit Reporting · 2026 · DOI

  • What is the level of interest of accounting-related scientists in this subject? The latest correctly conducted scan of the issue of NFR will reliably summaries the current state of knowledge, providing information about gaps in the literature and the need to carry out new research.

    Non-financial reporting: identifying the role of accounting through bibliometric analysis · 2023 · DOI

  • Despite widespread use of CEO financial incentives, lack of evidence supporting their use, beyond the bonus‐ROA effect we identify, suggests caution regarding current CEO financial incentive practice and greater consideration of alternative arrangements to enhance firm performance.

    Does chief executive compensation predict financial performance or inaccurate financial reporting in listed companies: A systematic review · 2023 · DOI

  • Making changes in the criteria of an entity’s inclusion as an SME and in its obligation to audit can be one solution for the problem of insufficient information.

    ACCESSIBILITY OF FINANCIAL INFORMATION IN RELATION TO CHANGES IN SIZE OF ENTITIES CAUSED BY THE COVID‐19 CRISIS · 2022 · DOI

  • By examining South Korea’s Code of Best Practices for Corporate Governance and the corporate governance disclosure report and comparing this to the recommendations of the ICGN Korea Governance Priorities report of 2022, this paper argues that while efforts to mandate corporate governance disclosure have been ongoing, efforts to make accurate and timely disclosure for the benefit of foreign investors are still lacking.

    South Korea’s ‘Unfriendly’ corporate governance disclosure to foreign investors · 2022 · DOI

  • For regulators, several models are economically viable as false positive costs are limited by the number of investigations regulators can initiate, and by the relatively low market value loss a “falsely accused” firm would bear in denials of requests under the Freedom of Information Act (FOIA).

    The Cost of Fraud Prediction Errors · 2021 · DOI

  • Research limitations/implications Studies allowing a greater understanding of how banks with extensive governmental ownership define and disclose CSR in this particular region of the world are scarce and exploratory in nature.

    Determinants of corporate social responsibility disclosures of UAE national banks: a multi-perspective approach · 2019 · DOI

  • The Internal Revenue Service (IRS) devotes substantial resources to audit tax returns of earned income tax credit (EITC) claimants, but little is known about the deterrence effect of these audits.

    THE EFFECTS OF IRS AUDITS ON EITC CLAIMANTS · 2018 · DOI

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