Big 4 auditor affiliation and accruals quality in Bangladesh

M. Humayun Kabir (Department of Accounting, Faculty of Business, Auckland University of Technology, Auckland, New Zealand)
Divesh Sharma (School of Accountancy, Coles College of Business, Kennesaw State University, Kennesaw, Georgia, USA)
Md Ainul Islam (School of Accounting and Commercial Law, Victoria University of Wellington, Wellington, New Zealand)
Amirus Salat (Department of Accounting and Information Systems, University of Dhaka, Dhaka, Bangladesh)

Managerial Auditing Journal

ISSN: 0268-6902

Publication date: 4 January 2011



Bangladesh is an emerging economy and international audit firms operate there through affiliated local audit firms. The Bangladesh audit market can be characterized as an intensely competitive small audit market with relatively poor demand for high‐audit quality. In addition, Bangladesh has a relatively small and under developed but growing capital market that is characterized by poor corporate regulation and weak investor protection. The purpose of this paper is to examine the association between Big 4 affiliated auditors and accruals quality in Bangladesh.


Following prior literature, this paper uses both absolute discretionary accruals and signed discretionary accruals as proxies of accruals quality. The sample is 382 firm‐year observations and covers fiscal years 2000‐2003.


It was found that the association between Big 4 affiliates and accruals quality in Bangladesh depends on measures of accruals quality and accruals models used. Overall, Big 4 affiliates do not have a positive impact on accruals quality of their clients in Bangladesh.


This paper contributes to the literature on audit quality and accruals quality. The results potentially suggest that Big 4 affiliates do not have any positive impact on accruals quality of clients in an intensely competitive audit market where the demand for quality audit is poor and monitoring is lax and raise potential implications for policy makers and market participants in Bangladesh.



Humayun Kabir, M., Sharma, D., Islam, A. and Salat, A. (2011), "Big 4 auditor affiliation and accruals quality in Bangladesh", Managerial Auditing Journal, Vol. 26 No. 2, pp. 161-181.

Download as .RIS



Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited

Please note you might not have access to this content

You may be able to access this content by login via Shibboleth, Open Athens or with your Emerald account.
If you would like to contact us about accessing this content, click the button and fill out the form.
To rent this content from Deepdyve, please click the button.