The Sarbanes-Oxley Act, Earnings Management, and Post-Buyback Performance of Open-Market Repurchasing Firms

2013 ◽  
Vol 48 (6) ◽  
pp. 1847-1876 ◽  
Author(s):  
Sheng-Syan Chen ◽  
Chia-Wei Huang
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Earnings Management ◽  
Audit Committee ◽  
Negative Association ◽  
Real Earnings Management ◽  
Open Market ◽  
Sarbanes Oxley ◽  
Repurchase Announcements ◽  
Management Audit

AbstractWe examine how the Sarbanes-Oxley Act (SOX) affects pre-repurchase earnings management and its association with post-repurchase firm performance. Unlike prior pre-SOX studies, our post-SOX results indicate that open-market repurchasers do not engage in pre-buyback downward accrual-based earnings management. Audit committee independence, reforms in corporate governance structures, and changes in executives’ equity holdings prompted by SOX may explain the findings. Post-SOX, the significant negative association between pre-repurchase abnormal accruals and post-repurchase performance disappears, the market reaction to repurchase announcements becomes significantly less favorable, and there is no evidence of any shift away from accrual-based to real earnings management.

scholarly journals CORPORATE GOVERNANCE DAN MANAJEMEN LABA RIIL PERBANKAN ISLAM INDONESIA DAN MALAYSIA

2018 ◽  
Vol 7 (4) ◽  
Author(s):  
M. Zubaedy Sy ◽  
Nuryati Nuryati ◽  
Surifah Surifah
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Audit Committee ◽  
Stock Exchange ◽  
Cash Flows ◽  
Profit Sharing ◽  
Least Square ◽  
Real Earnings Management ◽  
Annual Reports ◽  
Islamic Banks

 The main objective of this research is to create good corporate governance that is able to restrictopportunistic REM. The specific objectives of this study are 1) to provide evidence of difference inthe practices of CG and REM in Indonesian and Malaysian Islamic banks,and 2) to provide empirical evidence of the influence of CG on the REM of Indonesian and Malaysian Islamic banks.           The study was conducted on Indonesian and Malaysian Islamic banks from 2011 to 2016by using purposive samplingmethod. The research data is secondary data in the form of annual reports and financial reports originating from the Indonesian Banking Directory, the Indonesia Stock Exchange and the Malaysia Stock Exchange. The analysis method used to test the differences between CG and real earnings management is the Man Whitney test whilethe method used to test the effect of CG on the REM of Islamic Banks in Indonesia and Malaysia is the multiple regression analysiswithordinary least square.            The results show that the practices of corporate governance in Indonesia and Malaysia have their own strengths and weaknesses. CG mechanism of Indonesia and Malaysia shows lower level in some parts and higher level in other parts. Malaysia’s REM islower than Indonesia’sREM through operating cash flow, investment profit sharing, and discretionary costs. The experimental results show that CG generally does not affect real earnings management and only the independent audit committee who is able to restrictreal earnings management through operating cash flows.            Riset ini  menguji  hubungan antara corporate governance (CG) dan manajemen laba berdasar aktivitas riil  atau disebut real earnings management (REM) bank-bank Islam  di Indonesia dan Malaysia. Tujuan jangka panjang riset ini adalah terciptanya good corporate governace yang mampu membatasi REM oportunistik. Target khusus penelitian ini adalah 1) memberi bukti empiris perbedaan praktik CG dan REM bank Islam  Indonesia dan Malaysia. 2) memberi bukti empiris pengaruh CG terhadap REM bank Islam  Indonesia dan Malaysia.             Metode penelitian menggunakan metode ilmiah - kuantitatif, dengan membangun satu atau lebih hipotesis berdasarkan pada suatu struktur  atau kerangka teori dan kemudian menguji hipotesis-hipotesis tersebut secara empiris. Penelitian dilakukan pada bank Islam  Indonesia dan Malaysia periode waktu 2011 sampai 2016. Metode pengambilan sampel secara purposive sampling. Data penelitian merupakan data sekunder berupa  annual report dan laporan keuangan yang berasal dari Directory Perbankan Indonesia, Bursa Efek Indonesia  dan Bursa Efek Malaysia.  Teknik analisis untuk menguji perbedaan CG dan manajemen laba riil adalah uji beda Man Whitney, sedangkan untuk menguji pengaruh CG terhadap REM Bank Islam  Indonesia dan Malaysia menggunakan analisis regresi berganda ordinary least square.            Hasil menunjukkan bahwa praktik corporate governance Negara Indonesia dan Malaysia, masing masing memiliki kelebihan dan kelemahan. Mekanisme CG ada yang lebih rendah, maupun lebih tinggi antara Negara Indonesia dengan Malaysia. REM Malaysia lebih rendah signifikan dari pada Indonesia, baik melalui arus kas operasi, bagi hasil investasi, maupun biaya diskresioner. Hasil uji menunjukkan bahwa pada umumnya mekanisme CG tidak berpengaruh terhadap manajemen laba riil. Hanya Independensi komite audit yang mampu menekan manajemen laba riil melalui arus kas operasi.Keywords:Corporate governance, real earnings management, Islamic banking.

The Effect of Board of Director Composition and Audit Committee Expertise on The Real Earnings Management in Indonesia

2020 ◽  
Vol 2 (1) ◽  
pp. 110-117
Author(s):  
Feby Astrid Kesaulya ◽  
Weny Putri ◽  
Dewi Sri
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Audit Committee ◽  
Good Governance ◽  
Real Earnings Management ◽  
The Real ◽  
Board Of Director ◽  
Good Corporate Governance ◽  
Board Director ◽  
Real Activities Manipulation

The Objective of this research was to prove that the implementation of good corporate governance will have an effect on the real activities manipulation which was done by the management. The implementations of good governance used by this research are board of director composition and audit committee expertise. This research was conducted in Indonesia by using 306 firm years’ observations. The result of this research showed a different result from previous researches. This research showed that the implementation of good corporate governance in the form of board director composition and audit committee expertise do not impact the practice of real activities manipulation. Or, in other words some of the good corporate governance tool could not mitigate the real activities manipulation in the company.

Audit committee effectiveness, audit quality and earnings management: a meta-analysis

2016 ◽  
Vol 58 (2) ◽  
pp. 179-196 ◽  
Author(s):  
Zgarni Inaam ◽  
Halioui Khamoussi
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Audit Committee ◽  
Audit Quality ◽  
Good Governance ◽  
Meta Analysis ◽  
Negative Relationship ◽  
Real Earnings Management ◽  
Institutional Setting ◽  
Content Type

Purpose – Many researchers, in several contexts, have investigated the influence of audit committee effectiveness and audit quality variables on reducing the extent of earnings management, and empirical evidence is rather inconsistent. Design/methodology/approach – The aim of this paper is to meta-analyze the results of 58 prior studies that examined whether differences in results are related to moderating effects associated with corporate governance mechanisms or measures of earnings management. Findings – The findings show that the meta-analysis identifies many significant relationships. The independence of the audit committee, its size, expertise and the number of meetings have a negative relationship with earnings management. Similar negative relationships exist between auditor size, specialization and earnings management. Research limitations/implications – This study contributes to the corporate governance literature. Further, recognizing the function of an audit committee and audit quality shows the value of considering an institutional setting in governance research. This study is significant to academic and practitioner literatures, policy makers and professional accounting bodies as it shows that governance reforms promote companies to adopt good governance practices. The results also give useful information to investors in examining the effect of audit committee characteristics and audit quality on earnings quality. Originality/value – This study extends existing research on audit committee and audit quality to oversee both accrual and real earnings management using meta-analysis. Thus, this study has the potential to help stakeholders, board of directors, regulators and auditors, who are related with enhancing the supervision of firms and reducing the opportunities given to managers, to engage in earnings management.

scholarly journals CORPORATE GOVERNANCE DAN MANAJEMEN LABA RIIL PERBANKAN ISLAM INDONESIA DAN MALAYSIA

2018 ◽  
Vol 7 (4) ◽  
Author(s):  
M. Zubaedy Sy ◽  
Nuryati Nuryati ◽  
Surifah Surifah
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Audit Committee ◽  
Stock Exchange ◽  
Cash Flows ◽  
Profit Sharing ◽  
Least Square ◽  
Real Earnings Management ◽  
Annual Reports ◽  
Islamic Banks

The main objective of this research is to create good corporate governance that is able to restrictopportunistic REM. The specific objectives of this study are 1) to provide evidence of difference inthe practices of CG and REM in Indonesian and Malaysian Islamic banks,and 2) to provide empirical evidence of the influence of CG on the REM of Indonesian and Malaysian Islamic banks.           The study was conducted on Indonesian and Malaysian Islamic banks from 2011 to 2016by using purposive samplingmethod. The research data is secondary data in the form of annual reports and financial reports originating from the Indonesian Banking Directory, the Indonesia Stock Exchange and the Malaysia Stock Exchange. The analysis method used to test the differences between CG and real earnings management is the Man Whitney test whilethe method used to test the effect of CG on the REM of Islamic Banks in Indonesia and Malaysia is the multiple regression analysiswithordinary least square.            The results show that the practices of corporate governance in Indonesia and Malaysia have their own strengths and weaknesses. CG mechanism of Indonesia and Malaysia shows lower level in some parts and higher level in other parts. Malaysia’s REM islower than Indonesia’sREM through operating cash flow, investment profit sharing, and discretionary costs. The experimental results show that CG generally does not affect real earnings management and only the independent audit committee who is able to restrictreal earnings management through operating cash flows.            Riset ini  menguji  hubungan antara corporate governance (CG) dan manajemen laba berdasar aktivitas riil  atau disebut real earnings management (REM) bank-bank Islam  di Indonesia dan Malaysia. Tujuan jangka panjang riset ini adalah terciptanya good corporate governace yang mampu membatasi REM oportunistik. Target khusus penelitian ini adalah 1) memberi bukti empiris perbedaan praktik CG dan REM bank Islam  Indonesia dan Malaysia. 2) memberi bukti empiris pengaruh CG terhadap REM bank Islam  Indonesia dan Malaysia.             Metode penelitian menggunakan metode ilmiah - kuantitatif, dengan membangun satu atau lebih hipotesis berdasarkan pada suatu struktur  atau kerangka teori dan kemudian menguji hipotesis-hipotesis tersebut secara empiris. Penelitian dilakukan pada bank Islam  Indonesia dan Malaysia periode waktu 2011 sampai 2016. Metode pengambilan sampel secara purposive sampling. Data penelitian merupakan data sekunder berupa  annual report dan laporan keuangan yang berasal dari Directory Perbankan Indonesia, Bursa Efek Indonesia  dan Bursa Efek Malaysia.  Teknik analisis untuk menguji perbedaan CG dan manajemen laba riil adalah uji beda Man Whitney, sedangkan untuk menguji pengaruh CG terhadap REM Bank Islam  Indonesia dan Malaysia menggunakan analisis regresi berganda ordinary least square.            Hasil menunjukkan bahwa praktik corporate governance Negara Indonesia dan Malaysia, masing masing memiliki kelebihan dan kelemahan. Mekanisme CG ada yang lebih rendah, maupun lebih tinggi antara Negara Indonesia dengan Malaysia. REM Malaysia lebih rendah signifikan dari pada Indonesia, baik melalui arus kas operasi, bagi hasil investasi, maupun biaya diskresioner. Hasil uji menunjukkan bahwa pada umumnya mekanisme CG tidak berpengaruh terhadap manajemen laba riil. Hanya Independensi komite audit yang mampu menekan manajemen laba riil melalui arus kas operasi.Keywords:Corporate governance, real earnings management, Islamic banking.

The impact of audit committee on real earnings management: Evidence from Netherlands

2020 ◽  
Vol 4 (1) ◽  
pp. 33-46 ◽  
Author(s):  
Sana Masmoudi Mardessi ◽  
Yosra Makni Fourati
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Audit Committee ◽  
Stock Exchange ◽  
Gender Diversity ◽  
Real Earnings Management ◽  
Financial Expertise ◽  
Relevant Topic ◽  
And Gender ◽  
The Impact

This paper aims to examine the effect of the characteristics of an audit committee on real earnings management in the Dutch context. Our sample is composed of 80 non-financial companies listed on the Amsterdam Stock Exchange during the period between 2010 and 2017. Four proxies are used to measure audit committee characteristics, namely, audit committee independence, financial expertise, gender diversity, and audit committee meetings. To test our hypotheses, we use a regression model to identify the influence of a set of audit committee characteristics on real earnings management after controlling for firm audit committee size, leverage, size, loss, growth and board size. Our analyses provide evidence that audit committee independence and gender diversity constrain real earnings management. Our findings also suggest that audit committee financial expertise reduces to some extent the likelihood of engaging in real earnings management. To the best of our knowledge, the Dutch context is not yet explored especially following the issue of the long-awaited new Dutch Corporate Governance Code in 2016 which has been updated for a long period in 2008. Therefore, corporate governance is a relevant topic in the Netherlands. This study contributes geographically to the Audit Committee and earnings management literature that examines another possible method, specifically, real earnings management.

scholarly journals Pengaruh Corporate Governance, Profitabilitas, Leverage, dan Kualitas Audit Terhadap Real Earnings Management

2018 ◽  
Vol 2 (1) ◽  
pp. 35
Author(s):  
Clarissa Maya Devi
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Audit Committee ◽  
Audit Quality ◽  
Stock Exchange ◽  
Total Sample ◽  
Real Earnings Management ◽  
Manufacturing Company ◽  
Corporate Governace

 Abstract :The purpose of this study is to examine the affects of corporate governace, profitability, leverage and audit quality on real earnings management in manufacturing company  listed in Indonesia Stock Exchange during period 2014 until 2016. The total sample of this research was 63 manufacture companies. The result of this research shows that   profitability and audit quality has positive and significant affects on real earnings management, but corporate governance   and leverage has no effect on real earnings management. Keywords :Real Earnings Management, Corporate Governance, Audit Committee Meetings, Audit Committee of Accounting Experts, Profitability, Leverage, Audit Quality.

scholarly journals Leverage, Tata Kelola Perusahaan, dan Manajemen Laba Riil

2021 ◽  
Vol 4 (1) ◽  
pp. 72-89
Author(s):  
Ananto Prabowo ◽  
Indah Sari Pangestu
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Audit Committee ◽  
Management Practice ◽  
Secondary Data ◽  
Real Earnings Management ◽  
Governance Mechanism ◽  
Governance Mechanisms ◽  
Financial Reports ◽  
Corporate Governance Mechanisms

Earnings management is conducted by key internal personels within a firm through the utility of accounting policy judgements which then mislead financial reports. The level of leverage and corporate governance have the ability to influence the degree of earnings management implementation. This research has an objective to examine the leverage and corporate governance mechanisms influence on real earnings management. This research population is included in 50 companies with the best corporate governance implementation in Indonesia for the period of 2012-2018. By using the purposive sampling method, 126 observations fit the sample criteria. This research uses a quantitative approach and secondary data with a random effects’ regression model. This research shows leverage and corporate governance mechanisms, when combined, affect real earnings management. This research's supplementary results show that leverage cannot limit real earnings management practice and consecutively on corporate governance mechanism. Independent board of commissioner negatively and significantly exert influence on real earnings management, followed by the audit committee, reducing real earnings management practice. Meanwhile, institutional and managerial ownership do not present a significant merit on real earnings management. This research implicates the policy maker in justifying good corporate governance and practioners to look upon the possibility of real activities manipulation.

scholarly journals THE EFFECT OF GOOD CORPORATE GOVERNANCE AND FINANCIAL DISTRESS ON REAL EARNINGS MANAGEMENT

2021 ◽  
Vol 11 (3) ◽  
pp. 285-306
Author(s):  
Santi Yopie ◽  
Erika - Erika
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Financial Distress ◽  
Audit Committee ◽  
Audit Quality ◽  
Test Validity ◽  
Real Earnings Management ◽  
Family Ownership ◽  
Validity And Reliability ◽  
Good Corporate Governance

This research aims to analyze the effect of good corporate governance and financial distress on real earnings management. The sample in this study is a manufacturing company listed on Indonesia Stock Exchange for the 2016-2020 period. Data collection in this study was carried out using secondary data taken from the company's financial statement. The data were analyzed and tested using the SPSS 25 program to test descriptive statistics and outlier tests. The Smart PLS 3.0 program was used to test validity and reliability, test quality indexes, and test hypotheses. The results of this study indicate that institutional ownership has a significant effect on real earnings management, managerial ownership has no significant effect on real earnings management, family ownership has no significant effect on real earnings management, the audit committee has a significant effect on real earnings management, audit quality has a significant effect on management. Financial distress has a significant effect on real earnings management. The moderating variable in this study proves that family ownership has no significant effect on real earnings management which is moderated by political connections.  

scholarly journals CORPORATE GOVERNANCE DAN MANAJEMEN LABA RIIL PERBANKAN ISLAM INDONESIA DAN MALAYSIA

2018 ◽  
Vol 7 (4) ◽  
Author(s):  
Surifah Surifah ◽  
M. Zubaedy Sy ◽  
Nuryati Nuryati
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Audit Committee ◽  
Stock Exchange ◽  
Cash Flows ◽  
Profit Sharing ◽  
Least Square ◽  
Real Earnings Management ◽  
Annual Reports ◽  
Islamic Banks

The main objective of this research is to create good corporate governance that is able to restrictopportunistic REM. The specific objectives of this study are 1) to provide evidence of difference inthe practices of CG and REM in Indonesian and Malaysian Islamic banks,and 2) to provide empirical evidence of the influence of CG on the REM of Indonesian and Malaysian Islamic banks.           The study was conducted on Indonesian and Malaysian Islamic banks from 2011 to 2016by using purposive samplingmethod. The research data is secondary data in the form of annual reports and financial reports originating from the Indonesian Banking Directory, the Indonesia Stock Exchange and the Malaysia Stock Exchange. The analysis method used to test the differences between CG and real earnings management is the Man Whitney test whilethe method used to test the effect of CG on the REM of Islamic Banks in Indonesia and Malaysia is the multiple regression analysiswithordinary least square.            The results show that the practices of corporate governance in Indonesia and Malaysia have their own strengths and weaknesses. CG mechanism of Indonesia and Malaysia shows lower level in some parts and higher level in other parts. Malaysia’s REM islower than Indonesia’sREM through operating cash flow, investment profit sharing, and discretionary costs. The experimental results show that CG generally does not affect real earnings management and only the independent audit committee who is able to restrictreal earnings management through operating cash flows.            Riset ini  menguji  hubungan antara corporate governance (CG) dan manajemen laba berdasar aktivitas riil  atau disebut real earnings management (REM) bank-bank Islam  di Indonesia dan Malaysia. Tujuan jangka panjang riset ini adalah terciptanya good corporate governace yang mampu membatasi REM oportunistik. Target khusus penelitian ini adalah 1) memberi bukti empiris perbedaan praktik CG dan REM bank Islam  Indonesia dan Malaysia. 2) memberi bukti empiris pengaruh CG terhadap REM bank Islam  Indonesia dan Malaysia.             Metode penelitian menggunakan metode ilmiah - kuantitatif, dengan membangun satu atau lebih hipotesis berdasarkan pada suatu struktur  atau kerangka teori dan kemudian menguji hipotesis-hipotesis tersebut secara empiris. Penelitian dilakukan pada bank Islam  Indonesia dan Malaysia periode waktu 2011 sampai 2016. Metode pengambilan sampel secara purposive sampling. Data penelitian merupakan data sekunder berupa  annual report dan laporan keuangan yang berasal dari Directory Perbankan Indonesia, Bursa Efek Indonesia  dan Bursa Efek Malaysia.  Teknik analisis untuk menguji perbedaan CG dan manajemen laba riil adalah uji beda Man Whitney, sedangkan untuk menguji pengaruh CG terhadap REM Bank Islam  Indonesia dan Malaysia menggunakan analisis regresi berganda ordinary least square.            Hasil menunjukkan bahwa praktik corporate governance Negara Indonesia dan Malaysia, masing masing memiliki kelebihan dan kelemahan. Mekanisme CG ada yang lebih rendah, maupun lebih tinggi antara Negara Indonesia dengan Malaysia. REM Malaysia lebih rendah signifikan dari pada Indonesia, baik melalui arus kas operasi, bagi hasil investasi, maupun biaya diskresioner. Hasil uji menunjukkan bahwa pada umumnya mekanisme CG tidak berpengaruh terhadap manajemen laba riil. Hanya Independensi komite audit yang mampu menekan manajemen laba riil melalui arus kas operasi.Keywords:Corporate governance, real earnings management, Islamic banking. How to cite:Sy Zubaedy, M., Nuryati, Surifah (2018). Corporate Governance Dan  Manajemen Laba Riil Perbankan Islam Indonesia Dan Malaysia. JMM UNRAM, 7(4), 33 - 46

scholarly journals Real Earnings Management, Firm Performance, and Corporate Governance Mechanism

2021 ◽  
Vol 3 (2) ◽  
pp. 39-49
Author(s):  
Maria Stefani Osesoga ◽  
Rosita Suryaningsih ◽  
Febryanti Simon
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Earnings Management ◽  
Cash Flow ◽  
Stock Exchange ◽  
Real Earnings Management ◽  
Governance Mechanism ◽  
Discretionary Accrual ◽  
Corporate Governance Mechanism ◽  
The Impact

The purpose of this study is to analyze the impact of real earnings management on firm performance and the impact of corporate governance as an intervening variable in the relationship between real earnings management and firm performance. The object are companies include in Corporate Governance Perception Index during 2015-2019 and listed in Indonesia Stock Exchange (IDX) and analyzed by using path analysis method. Real earnings management has a significant effect on the firm performance. Furthermore, with corporate governance mechanism within the company, real earnings management significantly affect firm performance. This research is meaningful, but has limitations. The result cannot be generalizing because the sample only companies that listed in CGPI and IDX period 2015-2019. The research implication are as follows: top level management should be cautious about credit policy, cash flow from operation, discretionary expenditures, and production. Earnings management is one of variable that the most prevalent in recent studies but the proxy for earnings management in the recent studies used discretionary accrual. In this research, real earnings management is used to indicate earnings management which measured by abnormal cash flow from operation. Thus, it may provide some contribution to the literature.

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