The Moderating Effect of Audit Quality on the Links Between Stock Market Segmentations, Surplus Free Cash Flow, and Income-increasing Discretionary Accruals

The objective of this paper is to examine the impacts stock market segmentations (SMS) and surplus free cash flow (SFCF) on income-increasing discretionary accruals. study also provides initial evidence regarding influence audit quality (AQ) as a moderating variable those relationships. A sample non-financial firms was taken from list Amman Stock Exchange over period 2013-2019. Using Huber-White’s sandwich estimator for pooled OLS regression, current research presents empirical harmonious with prediction in all hypotheses. Further, findings document that Big 4 auditor weakens SMS-DAC SFCF-DAC associations, which suggests role effective mitigating management’s opportunistic behaviour. However, reported results provide beneficial information investors, regulators, external auditors, policymakers, shareholders, other countries similar institutional environment.