Impact of earnings management on value‐relevance of accounting information: empirical evidence from Japan

2004 ◽  
Vol 30 (11) ◽  
pp. 1-15 ◽  
Author(s):  
Ahsan Habib
Keyword(s):  
Earnings Management ◽  
Empirical Evidence ◽  
Value Relevance ◽  
Accounting Information

scholarly journals Debt covenant slack, earnings management, and value relevance of accounting information

2019 ◽  
Vol 6 (4) ◽  
pp. 86-96 ◽  
Author(s):  
Ni Putu Sintya Purnama Dewi ◽  
Dewa Gede Wirama
Keyword(s):  
Earnings Management ◽  
Empirical Evidence ◽  
Value Relevance ◽  
Stock Exchange ◽  
Accounting Information ◽  
Partial Least Square ◽  
Least Square ◽  
Performance Information ◽  
Debt Covenant ◽  
The Relationship

This study aims to examine the effect of debt covenant slack on the value relevance of accounting information, and whether earnings management works as an intervening variable. A total of 40 non-financial companies listed in Indonesia Stock Exchange from 2013 to 2017 were selected as sample. Three hypotheses were tested using partial least square and analyzed via path analysis. This study found that debt covenant slack positively affects the value relevance of accounting information. Possibly, the tendency of small debt covenant slacks in the firms causing the information of firms’ performance to be less relevant for the investor because they believe that the firms will prioritize the debt payments rather than dividends. Furthermore, empirical evidence from this study indicates that debt covenant slack affects investors’ decision in using firms’ performance information. However, no statistically significant effect was found neither on the relationship between debt covenant slack and earnings management nor on the relationship between earnings management and the value relevance of accounting information. Hence, earnings management is not an intervening variable in the effect of debt covenant slack on the value relevance of accounting information.

scholarly journals Reaksi Pasar atas Manajemen Laba

2019 ◽  
Vol 2 (1) ◽  
pp. 1
Author(s):  
Fery Friyo Handoko ◽  
Mu'minatus Sholichah
Keyword(s):  
Data Analysis ◽  
Earnings Management ◽  
Empirical Evidence ◽  
Capital Market ◽  
Abnormal Return ◽  
Accounting Information ◽  
Financial Statement ◽  
Agency Conflict ◽  
Manufacturing Company ◽  
Simple Regression

Abstract This research examine the capital market reaction on earnings management.  Agency conflict represented by information asymetry caused earnings management.  Managers have incentive to play accounting method and estimate to gain certain amount of earnings.  Hereafter, investor have interest regarding their invesment decision.  They rely on accounting information that represented in financial statement.Based on premise in Signalling Theory, we then hypothesized that investor would response any information addressed to them.Sample and population that used to test hypothesis taken from listed manufacturing company during 2015-2017.  We documenting data from financial statement items.  We obtain 40 manufacturing company that comply to purposive sampling requirement.  We use simple regression to do data analysis.  We found the empirical evidence that market reac the earnings management indication.  There is empirical fact that cummulative abnormal return decreas when determinate by discretionarry accruals.  This research conclude that market reacting the earnings management indication generally.

scholarly journals Manajemen Laba Memoderasi Pengaruh Perubahan Laba, Perubahan Nilai Buku Ekuitas pada Relevansi Nilai Informasi Akuntansi

2019 ◽  
pp. 1419
Author(s):  
I Gede Ardian Andriawan ◽  
I Dewa Nyoman Wiratmaja
Keyword(s):  
Regression Analysis ◽  
Data Analysis ◽  
Earnings Management ◽  
Agency Theory ◽  
Value Relevance ◽  
Accounting Information ◽  
Financial Statements ◽  
Book Value ◽  
Book Values ◽  
Positive Effect

The research objective is to prove earnings management moderates the effect of earnings changes and changes in equity book values on the relevance of the value of accounting information. Data analysis using multiple regression analysis and moderated regression analysis is used to test earnings management in moderating the effect of earnings changes and changes in equity book values on the relevance of the value of accounting information. The results of the study are changes in earnings and changes in the book value of equity have a positive effect on the relevance of the value of accounting information, in addition earnings management weakens the influence of changes in earnings and changes in equity book values on the relevance of accounting information. The research implications are supporting and adding empirical evidence about agency theory, and positive contributions to users of financial statements. Keywords: Value relevance, profit, equity book value, earnings management

IFRS and value relevance: evidence based on Canadian adoption

2016 ◽  
Vol 12 (2) ◽  
pp. 136-160 ◽  
Author(s):  
Oliver N. Okafor ◽  
Mark Anderson ◽  
Hussein Warsame
Keyword(s):  
Empirical Evidence ◽  
Financial Reporting ◽  
Value Relevance ◽  
Accounting Information ◽  
Sensitivity Analyses ◽  
Evidence Based ◽  
Content Type ◽  
Ifrs Adoption ◽  
The Us ◽  
Us Gaap

Purpose – The purpose of this paper is to investigate whether financial information prepared and disclosed under International Financial Reporting Standards (IFRS) has incremental value relevance vs information prepared under generally accepted accounting principles (GAAP) in Canada. Design/methodology/approach – The authors employ a difference in differences methodology and estimate value relevance using: first, the adjusted R2 of regressions of stock price on book value and earnings; second, the adjusted R2 of regressions of stock returns on earnings and changes in earnings; and third, a time series incremental association return estimation. The authors use multiple models including a model similar to the Ohlson (1995) model and a modified Balachandran and Mohanram (2011) model to investigate value relevance in the period 2008-2013. Findings – The authors provide empirical evidence, based on unique Canadian environment, that accounting information prepared and disclosed under IFRS exhibits higher price and returns value relevance than accounting information prepared previously under local GAAP. Sensitivity analyses and yearly trends regressions produce collaborating evidence. Originality/value – The study provides early empirical evidence that value relevance increases in mandatory IFRS adoption, based on unique Canadian adoption. The Canadian adoption is unique because Canada: first, is the first G7 non-European country to adopt IFRS; second, had pursued a dual strategy of harmonizing with the US GAAP while supporting IFRS convergence; third, provided information environment that mitigates the problems associated with measuring the effects of IFRS adoption in the European countries where IFRS or its predecessor – international accounting standards – had permeated the reporting environment prior to the mandatory adoption in 2005; and fourth, allowed firms listed on the US exchanges to continue to use or adopt the US GAAP for financial reporting and thus, provided a group of benchmark firms drawn from the same social-political and economic environment as the treatment firms. The study clarifies prior inconsistent results from European samples.

scholarly journals Investigation on the value relevance of accounting information: evidence from incorporated companies in the Singapore capital market

2016 ◽  
Vol 13 (3) ◽  
pp. 9-21 ◽  
Author(s):  
Basil Abeifaa Der ◽  
Petr Polak ◽  
Masairol Masri
Keyword(s):  
Earnings Management ◽  
Cash Flow ◽  
Capital Market ◽  
Value Relevance ◽  
Accounting Information ◽  
Book Value ◽  
Valuation Model ◽  
Long Run ◽  
Short Run ◽  
Asset Turnover

The purpose of this study is to investigate the relative, incremental and the systematic changes in value relevance of the accounting information. This study also attempts to investigate the effect of earnings management on the value relevance of accounting information. It basically uses Ohlson’s (1995) valuation model to test the conceptual framework. The findings of this paper reveal that book value is more value relevant and incremental followed by earnings and, then, cash flow. Cash flow, however, performs a lesser valuation role. The results also show that combined book value and earnings are more value relevant than combined book value and cash flow. As a third contribution, the paper also finds that the value relevance of some accounting variables has increased over time, while others showed no evidence of their inclined or declined patterns in the value relevance of accounting information. Finally, the paper finds that earnings management has no effect on the value relevance of accounting information. Further analyses suggest that earnings management is opportunistic in the short run, but efficient in the long run, when firms are small or have high asset turnover

Corporate governance, earnings management and the value-relevance of accounting information: Evidence from Pakistan

2018 ◽  
Vol 05 (03) ◽  
pp. 1850025
Author(s):  
Waqas Bin Khidmat ◽  
Man Wang ◽  
Sadia Awan
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Positive Impact ◽  
Value Relevance ◽  
Stock Exchange ◽  
Accounting Information ◽  
Annual Reports ◽  
Book Value ◽  
Governance Practices ◽  
Using Data

This paper examines the effect of corporate governance and earnings management on the value relevance of accounting information. Using data collected from the annual reports of non-financial companies listed in Pakistan Stock Exchange, it is concluded that earnings and book value are value relevant. The value relevance of earnings decreases while the value relevance of book value increases for the firms engaged in the earnings management. On the contrary, good corporate governance practices have a positive impact on the value relevance of earnings as well as the book value. Firm-specific characteristics enhance the predictive power of the model by more than 14%. A robustness test was carried out for alternative measures of earnings management. For this purpose, first performance-matched discretionary accruals were calculated following Kothari et al. (2005). Second, short-term accruals (DeChow, 1994), long-term accruals (Teoh et al., 1998b) and total accruals (Whelan, 2004), are calculated to analyze the effect on the value relevance of earnings and book value. The results support our null hypothesis.

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