scholarly journals The Role of the Accounting Choices Related to Operating Items in Earnings Management: The Case of Algerian Listed Companies

2015 ◽  
Vol 18 (02) ◽  
pp. 121-155
Author(s):  
Kimouche Bilal
Keyword(s):  
Earnings Management ◽  
Listed Companies ◽  
Accounting Choices

scholarly journals Board independence and earnings management – a study of listed companies on Ho Chi Minh stock exchange

2020 ◽  
Vol 3 (SI) ◽  
pp. First
Author(s):  
Doan Phuong Nhi ◽  
Nguyen Thu Hien
Keyword(s):  
Earnings Management ◽  
Stock Exchange ◽  
Listed Companies ◽  
Independent Directors ◽  
Board Independence ◽  
Executive Directors ◽  
Current Period ◽  
The Board Of Directors ◽  
Period Performance

Board independence is reflected in many aspects, the most common of which is the existence of independent non-executive directors and the separation of Chairman and CEO roles. This study examines whether a highly independent board deters earnings management by its managers. Discretionary accruals are used to measure earnings management while current operating cash flow divided by lagged assets of current and future are used to measure manager's incentives. On a sample of 1230 observations from 244 HOSE listed companies that belong to VNX Allshare index in the period 2012-2017, this study provides significant evidence for corporate governance issues of Vietnamese listed companies. Specifically, the experimental results show that when the current period performance is poor and expected future period performance is good, and if one person holds both Chairman and CEO roles, he will carry out the transfer of a part of the future profits to the present to improve current year’s performance to satisfy personal interests. Unfortunately, all variables related to independent directors are statistically insignificant, confirming the fuzzy role of independent directors in monitoring and preventing earnings management in particular and agency problems in general. This study offers implications for the effectiveness and substance of the independent role of the board of directors in Vietnamese enterprises.

The Effect of the Presence ofAudit Committees on Earnings Management in Morocco

2017 ◽  
Vol 13 (4) ◽  
pp. 225 ◽  
Author(s):  
Mohamed Yassine El Haddad ◽  
Zakaria Ez-Zarzari
Keyword(s):  
Earnings Management ◽  
Stock Price ◽  
Audit Committee ◽  
Stock Exchange ◽  
Listed Companies ◽  
Audit Committees ◽  
Accurate Information ◽  
Industry Sectors

Our paper will try emphasizing the effect of the presence of audit committees on earnings management within the Moroccan context, and most specifically in the companies listed in the Casablanca stock exchange. We have adopted previous research embedded in the Dechow, Sloan and Sweeny (1995) model of earnings management that requires a maximum of 6 companies by sector, a condition that limited our sample to 27 companies dispatched only on 4 industry sectors. Given that the companies manipulate the accruals to show the increasing results or to maintain the stock price, the role of the audit committee is to ensure that this manipulation is to be reduced in order to provide investors with accurate information. In the Moroccan context, this reduction started appearing in 2014. The years 2011, 2012 and 2013 were marked by a preparation of implementation tools of these committees mainly the integration of independent administrators within the administrative boards. However, due to lack of data, this study might be limited given the fact that the year 2016, which represented a year where the listed companies should have created an audit committee, was not covered by our study.

scholarly journals Ownership structures and risk of financial misreporting: Evidence from China

2012 ◽  
Vol 9 (3) ◽  
pp. 330-344
Author(s):  
Jung-wha Lee ◽  
Lianhua Jin
Keyword(s):  
Earnings Management ◽  
Institutional Ownership ◽  
Active Role ◽  
Listed Companies ◽  
State Ownership ◽  
Real Earnings Management ◽  
Ownership Structures ◽  
Financial Misreporting ◽  
Institutional Shareholders

This study examines the association between the role of ownership structures and the risk of misreporting (earnings management and fraud) using a sample of 2,170 firm-years listed on the Shanghai A stock market between the years of 2004 and 2006. We used three different ownership structures (i.e., institutional, state and tradable ownership) and two earnings management methods (i.e., accruals-based and real earnings management) to investigate whether firms with various ownership structures will choose earnings management methods that damages the actual values the least, lowers earnings management and whether this lowers the risk of financial misreporting fraud. The major findings are as follows. First, we find that institutional ownership is negatively associated with earning management and lowers the risk of financial misreporting. Institutional ownership can prevent listed companies from real activities earnings management, and it negatively affects accruals-based earnings management in low state share firms but not in high state share firms. Second, we find that state ownership is positively associated with earnings management but lowers the risk of financial misreporting. Third, tradable shares are negatively but not significantly related to accruals-based earnings management but increase the risk of financial misreporting. According to our findings, state ownership has great impact on listed companies; it also impedes the active role of other shareholders in invested companies. This study supports calls for restructuring and strengthening the role of governance by institutional shareholders, reinforcing and transforming the function of state-owned asset supervision and administration commission of the state council (SASAC, an agent organisation of state shares) from inefficient state investors to efficient institutional investors.

Comprehensive Income: which potential effects on firms' performance evaluation and users' decision process?

2016 ◽  
pp. 55-94
Author(s):  
Pier Luigi Marchini ◽  
Carlotta D'Este
Keyword(s):  
Performance Evaluation ◽  
Decision Process ◽  
Financial Analysts ◽  
Listed Companies ◽  
Financial Statement ◽  
Comprehensive Income ◽  
Other Comprehensive Income ◽  
Gains And Losses ◽  
The Impact

The reporting of comprehensive income is becoming increasingly important. After the introduction of Other Comprehensive Income (OCI) reporting, as required by the 2007 IAS 1-revised, the IASB is currently seeking inputs from investors on the usefulness of unrealized gains and losses and on the role of comprehensive income. This circumstance is of particular relevance in code law countries, as local pre-IFRS accounting models influence financial statement preparers and users. This study aims at investigating the role played by unrealized gains and losses reporting on users' decision process, by examining the impact of OCI on the Italian listed companies RoE ratio and by surveying a sample of financial analysts, also content analysing their formal reports. The results show that the reporting of comprehensive income does not affect the financial statement users' decision process, although it statistically affects Italian listed entities' performance.

Earnings Management and Capital Resource Allocation: Evidence from China's Accounting-Based Regulation of Rights Issues

2004 ◽  
Vol 79 (3) ◽  
pp. 645-665 ◽  
Author(s):  
Kevin C. W. Chen ◽  
Hongqi Yuan
Keyword(s):  
Resource Allocation ◽  
Earnings Management ◽  
Listed Companies ◽  
Return On Equity ◽  
Rights Issue ◽  
Rights Issues ◽  
Over Time ◽  
Do So

From 1996 to 1998, listed companies in China were required to achieve a minimum return on equity (ROE) of 10 percent in each of the previous three years before they could apply for permission to issue additional shares. As a result of this rule, there was a heavy concentration of ROEs in the area just above 10 percent. We show that the Chinese regulators appear to have scrutinized firms using excess amounts of nonoperating income to reach the 10 percent hurdle. In addition, their ability to do so seems to have improved over time, which allows them to be better able to identify firms that subsequently performed better. However, many firms were still able to gain rights issue approval through excess nonoperating income. We show that these firms subsequently underperformed other approved firms that did not use the same practice, indicating that the Chinese regulators' objective of guiding capital resources toward the well-performing sectors is partially compromised by earnings management.

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