scholarly journals Analysis of Motives behind the Usage of Earnings Management in Practice under the Conditions of Global Economy

2021 ◽  
Vol 92 ◽  
pp. 02054
Author(s):  
Monika Poradova
Keyword(s):  
Earnings Management ◽  
Global Economy ◽  
Management Practices ◽  
Method Comparison ◽  
Value Added ◽  
Financial Statements ◽  
Global Environment ◽  
Economic Result ◽  
Results Management ◽  
Result Management

Research background: Due to the complexity of the issue of global economic result management, the presented paper focused on specific procedures that are used comprehensively in practice in a global environment. The present paper consists of four parts. The first part of the paper deals with the theoretical aspects of the issue addressed. The second part consists of a combination of themes and a description of the methods that are used globally in the economic environment. The third part includes an analysis of countries that were among the largest manipulators of the global economic result from 2009 to 2018. Subsequently, possible impacts on the financial statements are prepared. The fourth part is devoted to the conclusions of the issue addressed. Purpose of the article: The aim of this paper is to compare the motives that lead to the application of results management practices globally in a global environment. Methods: In the processing of the present paper, a descriptive method, comparison and synthesis were used. Findings & Value added: Accounting standards point out that earnings management can be conducted within the regulatory framework as well as in the conflict of the global environment. The result of the present paper is a comprehensive look at the procedures and issues of earnings management with regard to the functions of the financial statements in the global economy.

scholarly journals Motive behind Earnings Management Practices: Case in Public Property and Real Estate Companies in Indonesia

2020 ◽  
Vol 12 (1) ◽  
pp. 49
Author(s):  
Alwan Sri Kustono
Keyword(s):  
Real Estate ◽  
Earnings Management ◽  
Hypothesis Testing ◽  
Management Practices ◽  
Financial Statements ◽  
Public Companies ◽  
Public Property ◽  
Real Estate Sector ◽  
Testing Data ◽  
Stage Analysis

This study examines the antecedents and consequence variables of earnings management. This study is expected to explain the motive of earnings management practices by public property and real estate companies in Indonesia: opportunistic or efficient. The theory which is the basis for developing the hypotheses ise agency, positive accounting, and signaling theories simultaneously. This study is explanatory research which aims to explain the causal relationship between variables through hypothesis testing. Data of this research are financial statements of public companies in the property and real estate sector in Indonesia (2014-2018) with some criteria. There are 60 firm-years data used in the analysis. Hypothesis testing uses multiple linear regression two-stage. The first stage analysis is used to examine the effect of the antecedent earnings management variable. Regression second stage test the consequences of earnings management practices. The results show debt and independent commissioners affect earnings management. Management performs more dominant earnings management because of opportunistic interests than to maintain market value and the interests of its     shareholders. The implication of this research is to provide a comprehensive discourse on the motives for earnings management behavior in Indonesia. 

scholarly journals The global economy affected by the COVID-19

2021 ◽  
Vol 129 ◽  
pp. 01030
Author(s):  
Ladislav Vagner
Keyword(s):  
Sensitivity Analysis ◽  
Earnings Management ◽  
Future Development ◽  
Global Economy ◽  
Value Added ◽  
Chinese City ◽  
Development Scenarios ◽  
Research Article ◽  
The World ◽  
Macroeconomic Indicators

Research background: The disease, which broke out in December 2019 in the Chinese city of Wuhan and caused a pandemic around the world, has a constant impact on the economies of the countries even after almost two years. The issue of the effect of COVID-19 on the global economy and overall earnings management persists. Due to the topicality of the problem, we focused on the impacts and measures affecting the company’s operation. Purpose of the article: The purpose of this research article is to summarize current information on coronavirus and its effects almost two years after the outbreak. Additionally, outline three different scenarios that could occur. We also took into consideration scientific sources that deal with the shock of COVID-19. In addition, we summarize the opinions of scientific authors. Methods: Within the methodology, we used mainly the analysis and obtaining an objective picture of the current situation in the world. Following the outbreak of the pandemic, there have been significant inconstancies in GDP. Subsequently, we focus on the development of individual selected macro indicators that best describe the global economy. Findings & Value added: Finally, we offer three scenarios that outline three different situations that may occur, which we worked on based on a scenario analysis based on a modification of the sensitivity analysis, to specify future development scenarios based on macroeconomic indicators.

scholarly journals The Impact of Earnings Management on Stock Returns for Listed Industrial Firms on the Amman Stock Exchange

2019 ◽  
Vol 9 (3) ◽  
pp. 1
Author(s):  
Ahmed M. Al Omush ◽  
Walid M Masadeh ◽  
Rasha M. Zahran
Keyword(s):  
Earnings Management ◽  
Stock Returns ◽  
Management Practices ◽  
Stock Exchange ◽  
Financial Statements ◽  
Industrial Firms ◽  
Significance Level ◽  
Amman Stock Exchange ◽  
Study Population ◽  
Operating Cash Flow

This study aims to investigate the impacts of earning management on the stock returns of listed industrial firms on the Amman Stock Exchange, with the observance of (firm size and operating cash flow) as control variables for the study. In order to fulfill the purposes of this study, the researcher utilized (Jones model) and (Modified Jones model) to measure earning management through reliance on discretionary accruals as evidence of earnings management practices, and utilize (Market Return On the Stock model) to measure stock returns, and the study population was Mining and Extraction Industries firms also Food and Beverages firms listed in Amman Stock Exchange, the study was conducted on a sample of 18 firms which represents 75% of the study population for the period from 2014 to 2018, In addition to using descriptive and analytical approach to data collection, analysis, and testing hypotheses through financial statements of the firms in the study, the researcher has used the Statistical Package for Social Sciences (SPSS) program to test the hypotheses. This study creates many results some of which are: there is an insignificant relationship between earnings management practices and stock returns for listed industrial firms in Amman Stock Exchange during the study period at the significance level of 5%, Which reflects the poor efficiency in Amman Stock Exchange and not the information contained in the financial statements issued and therefore not impact stock prices, which in turn affects the stock returns, and there is an insignificant relationship between stock returns and operating cash flow at the level of significance of 5%, In addition found significant correlation between firm size and stock returns at the significance level of 1%. The researcher presented a set of recommendations; the following are most valuable: the importance of increasing the awareness of the relevant parties about the unreliability of financial statements issued by industrial companies listed on the Amman Stock Exchange in existence of the earnings management practice and not reflecting the information contained in the financial statements on prices and stock returns by holding seminars, conferences and meetings also Activating the role of audit committees further to be able to detect the practice of earnings management and decrease it.

scholarly journals PRAKTIK EARNING MANAGEMENT DAN PENGARUHNYA TERHADAP KOMPENSASI BONUS

2020 ◽  
Vol 3 (1) ◽  
pp. 100
Author(s):  
Siti Zubaidah
Keyword(s):  
Panel Data ◽  
Earnings Management ◽  
Management Practices ◽  
Hypothesis Test ◽  
Financial Statements ◽  
Test Method ◽  
Earning Management ◽  
Business Unit ◽  
Business Units ◽  
Business Entities

The purpose of this study is to identify earning management practices and analyze the effect of earnings management on bonus compensation. The object of research uses the Business Entity and Sharia Business Unit. The selected sample is 34 companies. Variables used are earnings management and bonus compensation. Data is collected through documentation in the form of financial statements of Business Entities and Sharia Business Units in 2017 and 2018. This study uses a hypothesis test. The test method used is panel data test using EViews 10 software. The results showed that the practice of earning management in Sharia Business Entities and Business Units is mostly done by income maximalization or increasing profit (50%) and income minimizasion or decreasing profit (50%), and there is a significant influence between earning management practices and bonus compensation.

scholarly journals Historical Development of Earnings Management Models

2021 ◽  
Vol 92 ◽  
pp. 02058
Author(s):  
Anna Siekelova
Keyword(s):  
Earnings Management ◽  
Historical Development ◽  
Management Practices ◽  
Current Issue ◽  
Value Added ◽  
Added Value ◽  
Management Issue ◽  
Management Models ◽  
The Usa ◽  
The 1960S

Research background: Contribution responds to the current issue of Earnings Management (hereafter „EM“) initiatives. Authors have been dealing with EM initiatives since at least the 1960s. Initial studies came from the USA. Due to the globalization, awareness of EM techniques and models created abroad is also reaching European countries. Especially after the recent economic fluctuations (financial crisis in 2009; COVID-19 in 2020), the application of EM principles in companies with an effort to achieve a balanced profit can be assumed. The issue of earnings management has begun to be associated with the issue of its measurement. The problem is a large number of models, so choosing one is not easy. Although earnings management issue has been investigated under various hypotheses, there is no agreement on a uniform detection or measurement of earnings management practices. A number of earnings management models can be found in studies. Many of them were created recently, others are older. Most originated abroad. Purpose of the article: The aim of the paper is to clarify the historical development of earnings management models. Methods: Bibliometric analysis for historical development of EM models. Findings & Value added: The added value of the contribution is in the clarification of the historical development of the EM model as well as clarify the development of profit models.

scholarly journals Public Accountants’ Perceptions Of The Acceptability Of Earnings Management Practices Through The Employment Of GAAP In The Post-Sox Period

2010 ◽  
Vol 26 (1) ◽  
Author(s):  
John E. McEnroe
Keyword(s):  
Earnings Management ◽  
Management Practices ◽  
Financial Statements ◽  
Securities And Exchange Commission ◽  
Font Size ◽  
Generally Accepted Accounting Principles ◽  
Sarbanes Oxley ◽  
Accounting Scandals ◽  
Audit Opinions ◽  
Certification Requirements

<p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt; mso-pagination: none;"><span style="font-size: 10pt;"><span style="font-family: Times New Roman;">Over fifteen years ago, Martens and McEnroe (1992) conducted a behavioral study involving earnings management through the use of Generally Accepted Accounting Principles (GAAP). Their findings indicated that auditors issued unqualified audit opinions on those financial statements and perceived little risk to litigation as a result. A decade later they conducted a similar study (Martens and McEnroe 2002) with the expectation that increased attention to earnings management by then chairman of the Securities and Exchange Commission (SEC), Arthur Levitt, would reduce auditors’ perceptions that the letter of GAAP is in itself an aegis or “safe harbor” against litigation. Although the authors found that auditors had become more conservative, they still issued unqualified opinions on financial statements in which transactions were reported in their form rather than their substance. Given the accounting scandals of Enron and WorldCom, among others, and the enactment of the Sarbanes-Oxley Act (SOX) in 2002, especially with its officers’ certification requirements, it was posited that auditors would exhibit a much more conservative approach than in either of the two previous studies. The results indicate that although auditors are more conservative than in the 1992 study, they still allow clients to engage in earnings management practices through the use of GAAP by issuing unqualified audit opinions on their financial statements. <strong style="mso-bidi-font-weight: normal;"></strong></span></span></p>

scholarly journals The Effect Of Non-Performing Financing (NPF) On Earnings Management Practices In Islamic And Conventional Bank

2019 ◽  
Vol 7 (1) ◽  
Author(s):  
Erika Eriyanti ◽  
Rianti Pratiwi ◽  
Muhammad Doddy
Keyword(s):  
Business Ethics ◽  
Earnings Management ◽  
Management Practices ◽  
Financial Statements ◽  
Financial Reports ◽  
Islamic Bank ◽  
Panel Data Regression ◽  
Management Procedures ◽  
Islamic Business Ethics ◽  
Conventional Bank

This study aims to examine the effect of Non-Performing Financing (NPF) to Earnings Management Practices in Islamic Bank and Conventional Bank.  Earnings management procedures are still regarded legal when they do not conflict with General Accepted Accounting Principles (GAAP), but when viewed from an Islamic perspective, particularly in Islamic business ethics and sharia management, earnings management practices are regarded to be incompatible with the principles contained in Islamic business ethics and sharia management.The data collection of this research uses documentation technique from financial reports of Islamic bank and conventional bank. The analytical method which is used in this study is panel data regression. This study found that the Non-Performing Financing (NPF) have a significant positive effect with Earnings Management. For the implication, investors and other financial statements customers are anticipated to be more cautious in evaluating financial statements. For business institutions, especially sharia business institutions, the principles of Islamic business ethics should always be instilled in carrying out their operations.

scholarly journals Pengaruh Kualitas Audit, Ukuran Perusahaan Dan Leverage Terhadap Manajemen Laba Pada Perusahaan Perbankan Yang Tercatat Di Bursa Efek Indonesia Tahun 2016-2018

2020 ◽  
Vol 1 (01) ◽  
pp. 56
Author(s):  
Rodhiya Maulidah ◽  
Rahmat Agus Santoso
Keyword(s):  
Linear Regression ◽  
Earnings Management ◽  
Multiple Linear Regression ◽  
Firm Size ◽  
Management Practices ◽  
Audit Quality ◽  
Stock Exchange ◽  
Financial Statements ◽  
Company Size ◽  
Earnings Information

The existence of earnings information that is needed in the financial statements can be targeted by parties who are not responsible for carrying out earnings management practices. There are several factors that can present earnings management practices, namely audit quality, company size and leverage. This study discusses the evaluation of quality, company size and leverage on earnings management in banking companies listed on the Indonesia Stock Exchange in 2016-2018. By using 117 samples of annual financial statements or financial statements of companies listed on the Indonesia Stock Exchange. Tests carried out using multiple linear regression. Regression results indicate the results of quality audits and firm size significantly influence earnings management. Meanwhile, leverage is not significant to earnings management. It is expected that the results of this study can add insight for users of financial statements to pay attention to audit quality and company size to avoid earnings management practices.

scholarly journals PERBEDAAN PERSEPSI ETIS DOSEN AKUNTANSI TERHADAP PRAKTIK EARNINGS MANAGEMENT DI KOTA PEKANBARU DALAM PERSPEKTIF GENDER

2013 ◽  
Vol 12 (2) ◽  
pp. 119
Author(s):  
Khairil Henry
Keyword(s):  
Earnings Management ◽  
Management Practices ◽  
Ethical Issues ◽  
Financial Statements ◽  
Distributed Data ◽  
Ethical Orientation ◽  
Ethical Perceptions ◽  
Inaccurate Information ◽  
Accounting Faculty ◽  
Significant Difference

Earnings management is an action that may mislead users of financial statements by presenting inaccurate information, and sometimes even the cause of the illegal act. Some empirical evidence suggests that the company is actively practicing earnings management. The practice of earnings management is a form of attention to ethical issues and so need to be introduced to curriculumdevelopment, because the practice of earnings management assessed ethically ambiguous. This study tried to see if there are differences in ethical perceptions of accounting faculty to earnings management practices in terms of the type of manipulation, the manipulation direction, materiality and intention of earnings management by gender. The population is accounting lecturer at several universities in Pekanbaru taken by purposive sampling. Data collection method used by distributing questionnaires and if normally distributed data then test the hypothesis 1 (H1) was performed using parametric statistical analysis tools is by using independent sample T test (different test for two independent samples/free). The results of this study showed, although there is no significant difference between the accounting faculty of men and women in ethical perception of earnings management, but more women accounting faculty have high ethical orientation or inclination not accept the practice of earnings management compared with man accounting lecturer.

scholarly journals Transfer Pricing and Controlled Transactions in Connection with Earnings Management and Tax Avoidance

2021 ◽  
Vol 92 ◽  
pp. 02031
Author(s):  
Katarina Kramarova
Keyword(s):  
Earnings Management ◽  
Income Tax ◽  
Transfer Pricing ◽  
Tax Avoidance ◽  
Value Added ◽  
Financial Statements ◽  
Discretionary Accruals ◽  
Detection Capability ◽  
Related Party Transactions ◽  
Business Entities

Research background: The way of pricing intra-group transactions (controlled transactions in the terms of transfer pricing) should be in line with the arm´s length principle, whether we consider nationally or transnationally related business entities. If this is not the case, these operations are a tool for earnings management between the companies. It is known that income tax is perceived by businesses as an unproductive withdrawal of own funds without obvious consideration, and therefore managing economic transactions at the level of related-party entities in order to minimize the tax liability is obvious and even expected. Purpose of the article: The aim of the paper is to find out if controlled transactions are used in connection with earnings management and tax avoidance in the selected Slovak company using proxies, which may carry this detection capability (ratios of related party transactions, book-tax differences ratio, and discretionary accruals ratio). Methods: The analytical part of the paper follows the Slovak transfer pricing legislation in force. Following the existing research studies, we test hypothetical relationship between the indicators of earnings management, related party transactions and tax avoidance by applying correlation analysis. We worked mainly with publicly available data from financial statements and notes to financial statements. Findings & Value added: The results indicate that the company managed earnings rather downwards, since the values of discretionary accruals ratio were negative. On the other side, it was not proven that earnings management was carried out purely with the intention of minimizing tax liability.

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