إدارة الأرباح وأثرها على جودة الأرباح المحاسبية : دراسة اختبارية على الشركات الصناعية الأردنية المساهمة العامة = Earnings Management and Its Impact on Accounting Earnings Quality : Experimental Study on the Jordanian Industrial Public Shareholding Companies

2017 ◽  
Vol 13 (2) ◽  
pp. 161-179 ◽  
Author(s):  
عبد الناصر إيراهيم نور ◽  
حنان العواوودة
Keyword(s):  
Experimental Study ◽  
Earnings Management ◽  
Earnings Quality ◽  
Accounting Earnings

scholarly journals Heterogeneity in earnings quality between different classes of companies after IFRS adoption: evidence from Brazil

2017 ◽  
Vol 28 (73) ◽  
pp. 113-131
Author(s):  
Roberto Black ◽  
Sílvio Hiroshi Nakao
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Value Relevance ◽  
Earnings Quality ◽  
Economic Incentives ◽  
Net Income ◽  
Accounting Earnings ◽  
Ifrs Adoption ◽  
Before And After

ABSTRACT This paper aims to investigate the existence of heterogeneity in earnings quality between different classes of companies after the adoption of the International Financial Reporting Standards (IFRS). IFRS adoption is generally associated with an increase in the quality of financial statements. However, companies within the same country are likely to have different economic incentives regarding the disclosure of information. Thus, treating companies equally, without considering the related economic incentives, could contaminate earnings quality investigations. The case of Brazil is analyzed, which is a country classified as code-law, in which tax laws determined accounting practice and in which IFRS adoption is mandatory. First, Brazilian companies listed on the São Paulo Stock, Commodities, and Futures Exchange (BM&FBOVESPA) were separated into two classes: companies issuing American Depositary Receipts (ADRs) before IFRS adoption and companies that did not issue ADRs until the adoption of IFRS. Then, this second class of companies was grouped, using cluster analysis, into two different subclasses according to economic incentives. Based on the groups identified, the quality of accounting earnings is tested for each class of the companies before and after IFRS adoption. This paper uses timely recognition of economic events, value relevance of net income, and earnings management as proxies for the quality of accounting earnings. The results indicate that a particular class of companies began showing conditional conservatism, value relevance of net income, and lower earnings management after IFRS adoption. On the other hand, these results were not found for the two other classes of companies.

Economic Effects of Tightening Accounting Standards to Restrict Earnings Management

2005 ◽  
Vol 80 (4) ◽  
pp. 1101-1124 ◽  
Author(s):  
Ralf Ewert ◽  
Alfred Wagenhofer
Keyword(s):  
Earnings Management ◽  
Rational Expectations ◽  
Earnings Quality ◽  
Accounting Standards ◽  
Relevant Information ◽  
Economic Effects ◽  
Real Earnings Management ◽  
Accounting Earnings ◽  
Marginal Benefit ◽  
Accounting Earnings Management

This paper examines the usual claim that tighter accounting standards reduce earnings management and provide more relevant information to the capital market. We distinguish between accounting and real earnings management and assume that a standard setter can only influence accounting earnings management by the tightness of standards. In a rational expectations equilibrium model, we find that earnings quality increases with tighter standards, but we identify several consequences that may outweigh this benefit. First, managers increase costly real earnings management because the higher earnings quality increases the marginal benefit of real earnings management. Second, tighter standards can increase rather than decrease expected accounting and total earnings management. Third, the expected total costs of earnings management can also increase. We provide conditions for the occurrence of each of these effects.

The Effects of Accounting Earnings Quality on Size of Stock Repurchases and Future Operating Performance

2018 ◽  
Vol 43 (6) ◽  
pp. 147-185
Author(s):  
Kyung Soon Kim ◽  
Seong In Moon ◽  
Ji Su Kang ◽  
Seon Min Bae
Keyword(s):  
Earnings Quality ◽  
Operating Performance ◽  
Stock Repurchases ◽  
Accounting Earnings

PENGARUH EARNINGS MANAGEMENT TERHADAP EARNINGS QUALITY

2010 ◽  
Author(s):  
Pupun Tri Wahyuni ◽  
Resti Yulistia Muslim
Keyword(s):  
Earnings Management ◽  
Sampling Method ◽  
Stock Exchange ◽  
Earnings Quality ◽  
Manufacturing Companies ◽  
Financial Report ◽  
Earnings Response Coefficient ◽  
Discretionary Accrual ◽  
Response Coefficient ◽  
Earnings Response

This research objective is to axamine empirically the influence of earnings management on earnings quality. The study motivated by the controversy of previous study about earnings management and earnings quality. Earnings management was measured by Discretionary Accrual and earnings quality was measured by Earnings Response Coefficient (ERC). The units were 128 (16x8) Quartal financial report in manufacturing companies listed in the Jakarta Stock Exchange, started from the year 2005 up to 2006. The data was collected using purposive sampling method. Statistical method used to test the hypotheses was multiple regressions. The result of the research showed that: the influence of earnings management on earnings quality was negative, sig 0.049. It means that the lower earnings management will be followed by higher earnings quality. This study supported the result of Fetham and Pae (2000), Nelson et al. (2000), Scott (2000), Lobo and Zhou (2001), also Teixeira (2002), Pudjiastuti (2006). 

Earnings management in non-public companies: the case of for-profit hospice organizations

2017 ◽  
Vol 29 (1) ◽  
pp. 1-19
Author(s):  
Kelly Noe ◽  
Dana A. Forgione ◽  
Pamela C. Smith ◽  
Hanni Liu
Keyword(s):  
Earnings Management ◽  
Financial Statements ◽  
Accounting Earnings ◽  
Public Companies ◽  
For Profit ◽  
Management Literature ◽  
Political Cost ◽  
Accounting Earnings Management ◽  
Public Scrutiny ◽  
Cost Factors

We examine earnings management in non-publicly listed companies, with a focus on for-profit (FP) hospice organizations, and extend the accounting earnings management literature to the hospice industry. FP hospice organizations file Medicare cost reports that include complete financial statements not otherwise publicly available. Managers of FP hospice organizations have incentives to manage earnings to increase performancebased bonuses, meet or beat bond covenant requirements, or avoid public scrutiny. We find total accruals are significantly positively associated with profitability, debt, and size factors. However, discretionary accruals are significantly negatively associated with debt and size, but not profitability. Thus, monitoring and political cost factors appear to effectively mitigate earnings management in this industry sector.

Revisiting earnings quality and bank efficiency among East African developing economies: do systemic banking and financial crises matter?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
David Mutua Mathuva ◽  
Moses Nyangu Nzuki
Keyword(s):  
Earnings Management ◽  
Developing Economies ◽  
Earnings Quality ◽  
Bank Loan ◽  
East African ◽  
Loan Loss ◽  
Profit Efficiency ◽  
Regional Economic ◽  
Content Type ◽  
Economic Bloc

PurposeIn this paper, the authors investigate whether the systemic local banking crises (LBCs) and global financial crisis (GFC) impact the association between bank profit efficiency and earnings quality in developing economies.Design/methodology/approachUsing panel data spanning 29 years over the period 1991–2019 for 169 banks drawn from five East African countries, the authors perform difference-in-difference multivariate analyses using the generalised method of moments (GMM) system estimator on a sample consisting of 2,261 bank-year observations.FindingsThe results, which are robust for endogeneity and other checks, show that banks with higher profit efficiency consistently report higher quality earnings. The authors further establish that whereas systemic LBCs contribute negatively to bank earnings quality, the GFC tends to have a positive impact. These results are upheld when the joint impacts of both systemic LBCs, GFC and profit efficiency on earnings quality are considered. The positive influence of profit efficiency and GFC on earnings quality is pronounced under income-decreasing earnings management. The impacts of profit efficiency, LBCs and GFC on earnings quality appear to be non-monotonic and vary across the sampled countries.Research limitations/implicationsThe study's findings are based on banks in five developing countries within a regional economic bloc. Additional studies could focus on other economic blocs for enhanced generalisability of the findings. In addition, some of the variables examined are studied at bank-level, while other variables are at country-level. Finally, the study establishes an association between the variables of interest, and this does not necessarily imply causation.Practical implicationsThe results provide useful insights to bank regulatory and supervisory agencies on the need to exercise increased risk-based scrutiny over bank loan loss provisioning and minimum loan loss reserve requirements. From an audit perspective, auditors need to be cautious and apply an enhanced risk-based audit especially when auditing banks during and after a financial, banking or systemic crisis. Credit rating agencies need to pay closer attention to the LLPs of distressed banks. Finally, bank investors and customers should be cautious when using bank financial statements, since bank managers of poorly performing banks might engage in aggressive earnings management.Originality/valueThe study is perhaps the first to examine the joint effects of systemic LBCs on the association between bank profit efficiency and the quality of earnings in a larger dataset of banks in a developing regional economic bloc. The authors also employ the GMM system estimator in the modelling, which helps address some weaknesses in prior studies.

scholarly journals Financial Factors Affecting Earnings Management and Earnings Quality: New Evidence from an Emerging Market

2020 ◽  
Vol 9 (1) ◽  
pp. 198-216
Author(s):  
Isam Saleh ◽  
Malik Abu Afifa ◽  
Fadi Haniah
Keyword(s):  
Earnings Management ◽  
Emerging Market ◽  
Earnings Quality ◽  
Panel Data Analysis ◽  
Insurance Companies ◽  
Policy Makers ◽  
Factors Affecting ◽  
Financial Factors ◽  
Study Population ◽  
New Evidence

The purpose of this study is to examine the effect of financial factors on earnings management and earnings quality. Moreover, the study examines the role of earnings management as a mediator in the effect of the financial factors on earnings quality. It provides some empirical evidences from an emerging market, especially from the Jordanian market. The study uses a panel data analysis method over a ten-year period (2009-2018). The study population includes all Jordanian insurance companies listed in Jordanian market at the end of the year 2019, and the study sample consists of 20 Jordanian insurance companies (a complete population), giving a total of 200 observations for each variable. The results indicate that all financial factors in the model combined affect the earnings management and earnings quality. In addition, earnings management negatively affects earnings quality, and earnings management fully mediates the effect of financial factors on earnings quality. The study advises that policy makers ought to follow good legislation to curb the company's earnings management activities. Hence, the policy makers need to apply regulations which enrich the company’s effectiveness and efficiency whilst protecting the investors and other interested parties from risk.

scholarly journals A Study on the Relationship between Earnings Quality and Capital Cost-Takes the China Listed Companies as a Sample

2021 ◽  
pp. 48-56
Author(s):  
Chih-Yi Hsiao ◽  
Hui-Hui Kuang ◽  
Hui-Ling Li ◽  
Jia-Li Liu
Keyword(s):  
Earnings Management ◽  
Earnings Quality ◽  
Least Square Method ◽  
Listed Companies ◽  
Capital Cost ◽  
Least Square ◽  
Accounting System ◽  
Ordinary Least Square ◽  
Research Findings ◽  
The Relationship

The phenomenon of false financial statements still exists. However, in addition to the risk of being punished, what kind of price do companies have to pay? In recent decades, with China's rapid progress in economic, the relevant accounting system and corporate governance standards are actively improving, and the earnings quality is improving. This paper takes China's listed companies from 2015 to 2019 as samples, and adopts quantile regression supplemented by ordinary least square method to explore the relationship between earnings quality and capital cost. The research findings show that the higher the earnings management, the higher the capital cost, especially for the company with low capital cost. Nevertheless, for the extremely company with high capital cost, earnings management can reduce the capital cost. The research results can provide the focus of regulators of listed companies and reference for the revision of relevant accounting system.

scholarly journals Goodwill And Goodwill Write-Downs: Their Effects On Earnings Quality For 2008 And 2009

2011 ◽  
Vol 7 (11) ◽  
Author(s):  
Don E. Giacomino ◽  
Michael D. Akers
Keyword(s):  
Earnings Management ◽  
Earnings Quality ◽  
Pension Plan ◽  
Expected Returns ◽  
Balance Sheets ◽  
Big Bath

This paper examines goodwill on corporate balance sheets.  Specifically, the paper measures the extent to which goodwill exists on corporate balance sheets and the degree of goodwill write-downs that have occurred recently.   We report on our study and a study by Intangible Business, which show that many firms carry substantial amounts of goodwill on their 2008 balance sheets.  Thus, because of the recent downturn in the economy and the markets, the potential for big bath earnings management for 2008 and 2009 exists.   In addition, because of reductions in expected returns on pension plan assets, many firms are likely to record much higher pension expenses.   We expect that the combination of goodwill impairments and increased pension expense will have significant effects on both the amount and the quality of earnings for 2008 and, possibly, 2009.

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