## Earnings Management, Board Independence And Audit Fees Considering The Firm’s Profitability Level – Data Analysis

First hypothesis explains there is a meaningful relationship between earnings management and audit fees. As the result in table 5, H hypothesis is rejected by the 0.95 meaningful level (a>p-value, 0.05>0.00). On the other hand, there is a meaningful relationship between earnings management and audit fees. Also, there is a straight relationship between earnings management and audit fees coefficient. Beta unstandardized coefficient is 0.007 and shows that 0.007 of change in audit fees deviation is explained by change in earnings management.
Second hypothesis explains there is a meaningful relationship between board independence and audit fees. As the result in table 5, H hypothesis is rejected by the 0.95 meaningful level (a > p-value, 0.05>0.00). On the other hand, there is a meaningful relationship between board independence and audit fees. Also, there is a reverse relationship between board independence and audit fees coefficient. Beta unstandardized coefficient is -0.441 and shows that 0.441 of change in audit fees deviation is explained by change in board independence.
Final hypothesis explains there is a meaningful difference between audit fees in different firms concerning the level of firms profitability. As the result in table 6, the leven statistic shows that the meaningful level is 0.062, so the variances are homogeneous. Also, the comparison of audit fees between groups and within groups in table 6 indicates that H hypothesis is rejected by the 0.95 meaningful level (a > p-value, 0.05>0.00). On the other hand, there is a meaningful difference between audit fees in different firms concerning the level of profitability.
Table 1 shows the results of stepwise static hypothesis test. The best regression model and independent variable that use in regression model can be determined by this test. The results show that five variables- company size, type of auditor, earnings management, board independence and Listing age- are effective factors on audit fees that can enter to the model. itat on
The results in table 2 explain the cause of expel the remark, leverage, current ratio, return on assets and loss variables. In Remarks case with due attention to the “t” parameter
0.671 and significant level of 0.503, the beta coefficient for this variable is not meaningful. Thus, it removes from the model.
Table 3 shows the correlation after removing the variables that has increased. R Square is 0.323 and shows that 0.323 of change in audit fees, is explained by change in independent variables (earnings management and board independence). Durbin Watson parameter is 1.753 which shows the model works better with five remaining variables.
The results of table 4 are about the test of meaningfulness of all independent variable coefficients. Results show that variable coefficients are meaningful on the level of confidence 0.99, before and after removing variables.

Table-1:Variables Entered

 Model Variables Entered Method 1 SIZE Stepwise 2 AUD Stepwise 3 ACA Stepwise 4 BODIND Stepwise 5 LISTAGE Stepwise

Table-2:Excluded Variables

 Model Beta In t Sig. PartialCorrelation Collinearity Statistics Tolerance VIF MinimumTolerance 4 REM 0.029a 0.671 0.503 0.034 0.914 1.094 0.791 LEV -0.046a -1.092 0.275 -0.055 0.985 1.015 0.792 CUR 0.028a 0.644 0.520 0.032 0.895 1.118 0.787 ROA -0.035a -0.801 0.424 -0.040 0.912 1.096 0.757 LOSS 0.022a 0.502 0.616 0.025 0.883 1.132 0.771

Table-3:Model Summery

 Model R R Square Adjusted R Square Std. Error of the Estimate Durbin-Watson 4 0.568a 0.323 0.314 0.553 1.753

Table-4: ANOVA

 Model Sum of Squares df MeanSquare F Sig. 4 Regression 57.425 5 11.485 37.491 0.000 Residual 120.392 393 0.306 Total 177.817 398

Table-5: Coefficients

 Model UnstandardizedCoefficients StandardizedCoefficients t Sig. CollinearityStatistics B Std. Error Beta Tolerance VIF 4 (Constant) 3.473 0.333 10.430 0.000 SIZE 0.180 0.025 0.333 7.147 0.000 0.895 1.158 AUD 0.347 0.059 0.255 5.831 0.000 0.903 1.107 ACA 0.007 0.002 0.170 3.639 0.000 0.892 1.163 BODIND -0.441 0.140 -0.136 -3.154 0.002 0.929 1.077 LISTAGE 0.009 0.004 0.101 2.357 0.019 0.930 1.075

Table-6:Descriptive statistics of audit fees

 Groups N Mean Std.Deviation Std.Error 95% Confidence interval for mean Lowerbound Upperbound Low profitability 100 5.31 0.5970 0.060 5.19 5.43 Middle profitability 199 5.53 0.6150 0.044 5.44 5.61 Up profitability 100 5.87 0.720 0.072 5.73 6.02 Total 399 5.56 0.668 0.033 5.49 5.62