The Influence of External Audit Quality on the Link Between Audit Committee Characteristics and Earnings Management in the Era of Sustainability and Artificial Intelligence
TL;DR
This research extends prior work by incorporating sustainability and AI-driven oversight into the governance–earnings management nexus in an emerging-market context by incorporating sustainability and AI-driven oversight into the governance–earnings management nexus in an emerging-market context.
Abstract
This study examines how audit committee characteristics influence earnings management, while assessing the moderating role of external audit quality within a sustainability-oriented and AI-enhanced reporting environment. The quantitative methodology was applied in this study by using data from 31 industrial firms listed on the Amman Stock Exchange between 2020–2024. Independence, meeting frequency, and financial expertise significantly reduce earnings management, whereas committee size shows no statistical effect. Audit firm size weakens these relationships. Integrating sustainability considerations and AI-supported analytics further highlights the importance of robust governance mechanisms. This research extends prior work by incorporating sustainability and AI-driven oversight into the governance–earnings management nexus in an emerging-market context. Findings are limited to industrial companies in Jordan and rely on publicly available financial data.