scholarly journals A Study On Relation Between Accounting Treatment For Capitalization Of R&D Expenditure And Earnings Management In The Korean Defense Industry

2018 ◽  
Vol 34 (2) ◽  
pp. 369-380
Author(s):  
Kyungkook Im ◽  
Chaechang Im
Keyword(s):  
Theoretical Model ◽  
Research And Development ◽  
Earnings Management ◽  
Positive Relationship ◽  
Discretionary Accruals ◽  
Defense Industry ◽  
Positive Influence ◽  
Panel Analysis ◽  
Development Expenditure

Overall, this paper examines and finds the relation between the ratio of accounting treatment for capitalization of research and development expenditure (RCR&D). The theoretical model derived from panel analysis resource on Korean defense industry information from 2009 to 2014 indicates that the RCR&D positively affect earnings management direction through a significantly positive relationship. Also, the effect of large defense industry firms’ RCR&D on earnings management direction is higher than that of small ones despite that large defense industry firms have discretionary accruals in (-) direction compared with small ones. In addition, the effect of defense industry firms’ RCR&D on earnings management direction is strong especially in earnings increasing group. Also the change of RCR&D is positive influence on discretionary accruals. This enforces that RCR&D can be related with earnings management direction.

A Study on Relationships Among Software Engineering Capabilities in Japan Using Panel Analysis

2013 ◽  
pp. 180-192
Author(s):  
Yasuo Kadono
Keyword(s):  
Quality Assurance ◽  
Project Management ◽  
Software Engineering ◽  
Research And Development ◽  
Business Performance ◽  
Social Research ◽  
Positive Influence ◽  
Panel Analysis ◽  
Management Quality ◽  
Assurance Process

To understand how software engineering capabilities relate to IT vendors’ business performance and business environment, the author designed social research on software engineering excellence (SEE) and administered it in 2005, 2006 and 2007 with the Japanese Ministry of Economy, Trade and Industry. The author measured the SEE survey results with regard to seven factors including service science characteristics: deliverables, project management, quality assurance, process improvement, research and development, human development, and contact with customers. This paper integrates 233 responses to the SEE surveys into a new database and identified 151 unique IT firms. Based on the results of the panel analysis, most SEE factors for a year had significant positive influences on the same factors the next year. Three paths existed to improving the level of deliverables through project management, quality assurance and research and development. Some SEE factors had significant positive influence on different factors in the following year diagonally. Some negative paths existed, implying that effort put toward a particular factor did not pay off during the research. These efforts may have longer-term effects on other SEE factors. In comparison to the overall structure, stratified analysis on the relationships among the seven factors suggested that year-to-year relationships of the independent vendors tend to be strengthened due to enhancement of series correlation.

scholarly journals The Influence’s Analysis of Deferred Tax Expense, Current Tax and Discretionary Accrual towards Earnings Management (Survey in Manufactured Company Registered at Indonesia Stock Exchange in the Period of 2014 – 2018

Webology ◽  
2020 ◽  
Vol 17 (2) ◽  
pp. 568-586
Author(s):  
Erike Anggraeni ◽  
Muslim Marpaung ◽  
Ersi Sisdianto ◽  
Bayu Tri Cahya ◽  
Muhammad Kurniawan
Keyword(s):  
Earnings Management ◽  
Stock Exchange ◽  
Discretionary Accruals ◽  
Positive Influence ◽  
Fiscal Year ◽  
Discretionary Accrual ◽  
The Difference ◽  
Deferred Tax ◽  
A Current ◽  
Tax Expense

The study aims to provide an overview of the influence of deferred tax expense, current tax and discretionary accruals to earnings management towards Earnings Management where it was caused by the temporary differences between accounting income and taxable profit. In this PSAK, there is a statement paragraph that can provide freedom of management in determining an earning in deferred tax of the difference between accounting standard and tax regulations in the amount of deferred tax payable related to accounting income in a current perioed or a current fiscal year. The amount of current tax is same with tax expense in SPT. The type of a method of this study is quantitative. Based on the hipothesis testing, it can be concluded that deferred tax expense and discretionary accruals have a significant positive influence toward earnings management while current tax has no significant positive towards Earnings Management in Manufactured Company registered at Indonesia Stock Exchange in the period of 2014 – 2018. The limitation of this study is that it only discusses how much influence the deferred tax expense, current tax and discretionary accruals have on earnings management, as well as the number of samples and populations that are less than 100 samples, thus opening up opportunities for new researchers by adopting the same theme. The implications of this study are expected to be able to add to the state of knowledge relating to the effect of deferred tax expense, current tax and discretionary accruals on earnings management.

scholarly journals Agricultural Research and Development Expenditure, Productivity and Adoption as a Panacea to Improved Rural Livelihoods; A Review of Literature

2020 ◽  
pp. 114-126
Author(s):  
Saul Ngarava
Keyword(s):  
Research And Development ◽  
Agricultural Research ◽  
Rural Livelihoods ◽  
Consumer Welfare ◽  
Temporal Variations ◽  
Positive Influence ◽  
Economic Variables ◽  
Development Expenditure ◽  
Agricultural Research And Development ◽  
Socio Economic Variables

Myriad of studies have been undertaken to evaluate contribution of agricultural research and development to improved rural livelihoods. Whether be it through influencing farm productivity, rural household income, employment creation and consumer welfare, agriculture research and development has been idealised to have a significant impact on livelihoods. This paper reviews past studies that have been undertaken in relation to agricultural research and development expenditure, factor input productivity and adoption by the rural poor in different agricultural aspects. The study identifies that there are some consistencies in reported findings of research and development expenditure having impact on improving agricultural output. Equally so, findings have also been consistent of agricultural productivity increasing at the instigation of research and development as well as the existence of an array of socio-economic factors having major influences on research and development innovation adoption. Despite the existence of spatial as well as temporal variations however, there do appear loopholes within the literature. Expenditure influences on output have appeared aggregated, with few studies, mainly from global research institutes, trying to subdivide how project specific expenditure has tended to influence the specified projects. Furthermore, studies on productivity measures of research and development despite being aggregated, have concentrated on how output has changed vis-à-vis changes in inputs utilised induced by research and development. A short fall however are studies based on the dynamism of the inputs relative to changes in output that they do instigate. Even the socio-economic variables tending to influence research and development output adoption appear to vary from technology to technology, in some instance having a positive influence and in other instances otherwise. Each project is thus unique and no array of diversification of socio-economic variables can be prescribed even though commonality could be identified.

scholarly journals Earnings Management to Avoid Financial Distress and Improve Profitability: Evidence from Jordan

2018 ◽  
Vol 11 (2) ◽  
pp. 222 ◽  
Author(s):  
Mohammad M. Humeedat
Keyword(s):  
Earnings Management ◽  
Financial Distress ◽  
Positive Relationship ◽  
Stock Exchange ◽  
Control Variable ◽  
Negative Relationship ◽  
Discretionary Accruals ◽  
Cross Sectional ◽  
Entire Study ◽  
Equity Ratio

Due to unstable economic and political conditions, many companies in the Middle East are undergoing various financial distress and decline in profitability. This paper examines the role of earnings management to avoid financial distress and improve profitability in 58 industrial corporations listed on Amman Stock Exchange for a period of 2011 to 2016, which constitutes 89% of the whole population. The total number of observations is 413 for the entire study period. The study uses a cross-sectional Jones model that was modified by (Kothari, Leone, and Wasley, 2005); to measuring discretionary accruals that used as a proxy for earnings management.The empirical results indicate that earning management is not affected by the Altman’s Z-score index, but it has a positive relationship with debt to equity ratio. This study also shows a positive relationship between earnings per share, returns on equity, and earnings management. Regarding the control variable, we found a negative relationship between cash flow from operation and discretionary accruals.

Influence of International Accounting Convergence on the Level of Earnings Management in both Brazilian and Chilean Companies

2015 ◽  
pp. 195-218 ◽  
Author(s):  
Alini da Silva ◽  
Caroline Sulzbach Pletsch ◽  
Roberto Carlos Klann ◽  
Luiza Betânia Fasolin ◽  
Jorge Eduardo Scarpin
Keyword(s):  
Earnings Management ◽  
Quantitative Research ◽  
Discretionary Accruals ◽  
T Test ◽  
International Accounting ◽  
Panel Analysis ◽  
Accounting Convergence

This study aimed to analyze the influence of international accounting convergence in the level of earnings management in both Brazilian and Chilean companies. The sample was composed by the Brazilian and Chilean firms listed in Thomson ONE Banker database and presenting the data needed for the research. The study period was that between 2004 and 2012. Descriptive, document and quantitative research was conducted, with the application of the KS Model, t Test for independent samples and panel analysis. In Chilean companies, it was found that the greater the variation of revenue, the greater the tendency to use discretionary accruals. In Brazilian companies, it became clear that the larger the firm, the higher the earnings management. It was concluded that the adoption of IFRS by Brazilian and Chilean firms contributed to the reduction of discretionary accruals and, therefore, earnings management, although this effect was significant only in Chilean companies.

A Study on Relationships Among Software Engineering Capabilities in Japan Using Panel Analysis

2011 ◽  
Vol 2 (3) ◽  
pp. 20-32 ◽  
Author(s):  
Yasuo Kadono
Keyword(s):  
Quality Assurance ◽  
Project Management ◽  
Software Engineering ◽  
Research And Development ◽  
Business Performance ◽  
Social Research ◽  
Business Environment ◽  
Positive Influence ◽  
Panel Analysis ◽  
Management Quality

To understand how software engineering capabilities relate to IT vendors’ business performance and business environment, the author designed social research on software engineering excellence (SEE) and administered it in 2005, 2006 and 2007 with the Japanese Ministry of Economy, Trade and Industry. The author measured the SEE survey results with regard to seven factors including service science characteristics: deliverables, project management, quality assurance, process improvement, research and development, human development, and contact with customers. This paper integrates 233 responses to the SEE surveys into a new database and identified 151 unique IT firms. Based on the results of the panel analysis, most SEE factors for a year had significant positive influences on the same factors the next year. Three paths existed to improving the level of deliverables through project management, quality assurance and research and development. Some SEE factors had significant positive influence on different factors in the following year diagonally. Some negative paths existed, implying that effort put toward a particular factor did not pay off during the research. These efforts may have longer-term effects on other SEE factors. In comparison to the overall structure, stratified analysis on the relationships among the seven factors suggested that year-to-year relationships of the independent vendors tend to be strengthened due to enhancement of series correlation.

The Effect of the Private Securities Litigation Reform Act of 1995 on Accounting Discretion of Client Managers of Big 6 and Non-Big 6 Auditors

2003 ◽  
Vol 22 (1) ◽  
pp. 93-108 ◽  
Author(s):  
Ho Young Lee ◽  
Vivek Mande
Keyword(s):  
Earnings Management ◽  
Potential Benefit ◽  
Audit Quality ◽  
Discretionary Accruals ◽  
Securities Litigation ◽  
Investor Confidence ◽  
Joint And Several Liability ◽  
Before And After ◽  
Deep Pockets

This study examines how the Private Securities Litigation Reform Act of 1995 (PSLRA) affects auditors' incentives to curtail earnings management by client managers. The most significant reform of PSLRA was the elimination of joint and several liability under which auditors and other parties could be named to lawsuits because of ‘deep pockets’ rather than culpability. While the elimination of joint and several liability provides significant relief to auditors from litigation, opponents of PSLRA argue that it discourages meritorious lawsuits and lowers audit quality, reducing investor confidence in markets. The potential benefit would be greatest for Big 6 firms, who have the highest exposure (largest clients) and significant resources to pay damages. In this paper we argue that if PSLRA induces decreases in audit quality, then we should expect increases in the prevalence of accruals after this Act. To investigate this issue we examine the discretionary accruals of a sample of 2,600 companies three years before and after the act. Our results support this hypothesis. Specifically, we find that after PSLRA income-increasing discretionary accruals rise for auditees of Big 6 firms but not for auditees of non-Big 6 firms.

Earnings Management, Litigation Risk, and Asymmetric Audit Fee Responses

2006 ◽  
Vol 25 (1) ◽  
pp. 85-98 ◽  
Author(s):  
Lawrence J. Abbott ◽  
Susan Parker ◽  
Gary F. Peters
Keyword(s):  
Earnings Management ◽  
High Growth ◽  
Audit Fees ◽  
Discretionary Accruals ◽  
Litigation Risk ◽  
Audit Fee ◽  
Growth Firms ◽  
Price Earnings Ratio ◽  
Year 2000 ◽  
Conservative Bias

This study examines the association between audit fees and earnings management, using publicly available fee data. We hypothesize that, due to asymmetric litigation effects, audit fees decrease (increase) with a client's risk of income-decreasing (increasing) earnings management risk. We also hypothesize that the positive relation between income-increasing earnings management risk and audit fees is heightened for clients that are high-growth firms. We test our hypotheses with a sample of 429 public, non-regulated, Big 5 audited companies, using fee data for the year 2000. We find that downward earnings management risk, as estimated by negative (i.e., income-decreasing) discretionary accruals, is associated with lower audit fees. We also document that upward earnings management risk, as estimated by positive discretionary accruals, is associated with higher audit fees and that the interaction of this risk with an industry-adjusted price-earnings ratio has an incrementally significant, positive effect on fees. We interpret our findings as consistent with a conservative bias on the part of auditors. The conservative bias arises from asymmetric litigation risk in which income-increasing discretionary accruals exhibit greater expected litigation costs than income-decreasing discretionary accruals (Simunic and Stein 1996; Palmrose and Scholz 2004; Palmrose et al. 2004; Richardson et al. 2002; Heninger 2001).

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