scholarly journals Earnings Management and New Listings: Evidence from Vietnam

2021 ◽  
Author(s):  
Anh Huu Nguyen ◽  
Chi Thi Duong
Keyword(s):  
Stock Market ◽  
Earnings Management ◽  
Initial Public Offerings ◽  
Stock Exchange ◽  
Management Practice ◽  
Developed Countries ◽  
Seasoned Equity Offerings ◽  
The Body ◽  
Cross Sectional ◽  
Listed Firms

Earnings management around corporate events has been widely discussed in literature review which has shown mixed results. Furthermore, prior studies have extensively focused on earnings management around initial public offerings (IPOs) and seasoned equity offerings (SEOs), while less attention has been given to the listing event. Another motivation comes from the context of the undeveloped market. While earnings management has been widely discussed in developed countries, it is still limited in emerging countries in general and in Vietnam in particular, due to the lack of research on this phenomenon and the unique institutional feature and pre-listing profit requirement in Vietnam’s stock market. This research is conducted to investigate the earnings management behaviour around listing event in Vietnam. The sample of this study consists of financial data from 189 newly listed companies on the Ho Chi Minh City Stock Exchange (HOSE) for the period of 2009–2017. Four cross-sectional models were used to estimate earnings management, including two total accruals-based models and two current accruals-based models. This research makes important contributions to the body of literature on Vietnam’s stock market. First, this study provides empirical evidence suggesting a greater positive earnings management practice of newly listed firms in current accrual models than those in total accrual models. Second, the results from both parametric and non-parametric test statistics show that HOSE-listed firms present higher levels of earnings management in the year prior to the listing than those in post-listing year and two subsequent years after listing. Finally, new listing requirements in 2012 require the company’s return on equity (ROE) in the most recent year to be at least 5%. However, the paper finds no evidence to suggest that relative to all newly listed firms after the new profit requirement exhibit greater positive earnings management than that of firms listed before the change in pre-listing year.

scholarly journals Wealth Inequality as a Predictor of Subjective Health, Happiness and Life Satisfaction among Nepalese Women

2018 ◽  
Vol 15 (12) ◽  
pp. 2836 ◽  
Author(s):  
Zhifei He ◽  
Zhaohui Cheng ◽  
Ghose Bishwajit ◽  
Dongsheng Zou
Keyword(s):  
Economic Status ◽  
Wealth Inequality ◽  
Well Being ◽  
Developed Countries ◽  
Subjective Health ◽  
Household Wealth ◽  
The Body ◽  
Status Report ◽  
Wealth Status ◽  
Cross Sectional

Socioeconomic status has shown to be associated with subjective health, well-being, satisfaction with overall life and estimation of happiness. The body of research concerning the question of whether higher economic status leads to better health and well-being are mostly from developed countries. The present study was therefore conducted among women in Nepal with an aim to investigate whether household wealth status is associated with satisfaction about (1) self-reported health, (2) happiness, and (3) life overall. Methods: Subjects were 5226 Nepalese women aged between 15 and 24 years. Cross-sectional data were extracted from round 5 of the Nepal Multiple Indicator Cluster Survey (NMICS), conducted in 2014, and analyzed using chi-square tests of association, bivariate and multivariable regression methods. Results: Wealth status was significantly associated with satisfaction about health, estimation of happiness and satisfaction. Compared with women in the poorest households, the odds of positive estimation about overall happiness were respectively 30% higher for poorer (p < 0.0001; 95% CI = 1.653–3.190), 80% higher for middle (p = 0.001; 95% CI = 1.294–2.522), 64% higher for richer (p = 0.006; 95% CI = 1.155–2.326), and 40% higher for richest households. The odds of reporting satisfaction about life were respectively 97% higher for poorer (p < 0.0001; 95% CI = 1.680–2.317), 41% higher for middle (p < 0.0001; 95% CI = 1.165–1.715), 62% higher for richer (p < 0.0001; 95% CI = 1.313–2.003), and 31% higher for richest households (p = 0.043; 95% CI = 1.008–1.700). Conclusion: Our results conclude that women in households with lower wealth status report poorer subjective health, quality of life and happiness. However, the findings need to be interpreted in light of the existing sociocultural conditions mediating the role of household wealth status on women’s lives.

scholarly journals Surplus Free Cash Flow, Stock Market Segmentations and Earnings Management: The Moderating Role of Independent Audit Committee

2020 ◽  
pp. 097215092093406
Author(s):  
Ahmad A. Toumeh ◽  
Sofri Yahya ◽  
Azlan Amran
Keyword(s):  
Stock Market ◽  
Earnings Management ◽  
Cash Flow ◽  
Audit Committee ◽  
Management Practices ◽  
Free Cash Flow ◽  
The Body ◽  
Moderating Role ◽  
Independent Audit

Management engages in earnings manipulation for different reasons. This article argues that low-growth firms with high free cash flow will opt for income-increasing earnings management in order to obscure the low profits derived from their investments in negative net present value (NPV) projects. On the other hand, we argue that the listed companies might be interested in being listed in the first market due to its privileges and to preserve the competitiveness, through managing their earnings upwardly, so that they can satisfy the condition of achieving a particular earnings limit. This article should advance the body of earnings management literature in the Jordanian context by examining the effect of the moderating role of an independent audit committee (IAC) in the association between surplus free cash flow (SFCF) and income-increasing discretionary accruals (DAC). Further, this is the initial empirical attempt to investigate the moderation effect of IAC between stock market segmentations (SMS) and positive DAC. The results of this current study offer original and beneficial information for the Jordanian government and other countries with a similar institutional environment because the study promotes the application of applying IAC as an efficient tool to constrain management behaviour towards manipulation of the accruals. On top of that, this research offers information concerning the prevailing situation of earnings management practices and corporate governance in Jordan, in which shareholders, local and international investors, policymakers, regulators and academic researchers are interested. Finally, panel data analyses and various statistical techniques are employed to derive conclusions.

scholarly journals IFRS ADOPTION AND EARNINGS MANAGEMENT PRACTICE: EVIDENCE FROM INDONESIA COMPANIES

2019 ◽  
Vol 7 (2) ◽  
pp. 229-239
Author(s):  
Vina Kholisa Dinuka
Keyword(s):  
Earnings Management ◽  
Management Practices ◽  
Stock Exchange ◽  
Management Practice ◽  
Real Earnings Management ◽  
Manufacturing Companies ◽  
Discretionary Accrual ◽  
Ifrs Adoption ◽  
Negative Effect ◽  
Ifrs Implementation

The purpose of this study is to verify IFRS contribution by examining the presence of Accrual Earnings Management (AEM) and Real Earnings Management (REM) in the period pre- and post- IFRS implementation in manufacturing companies in Indonesia. AEM is measured by absolute value of discretionary accrual, while REM is proxied by three measurements of REM, they are abnormal cash flow operation, abnormal production and abnormal discretionary expenses. The sample is taken from Indonesia stock exchange in 2009-2011 and 2013-2015. 2012 is Indonesia adoption period and it is excluded from the sample, because it is considerated as transitory year. This study uses regression analysis and Paired t-test to compare the presence of AEM and REM preceding and following IFRS implementation. The findings reveal that IFRS adoption has significantly negative effect towards AEM and REM. It indicates that the following IFRS implementation, AEM and REM are decrease. Therefore, IFRS is able to reduce earnings management practices in manufacturing companies in Indonesia both for AEM and REM.

scholarly journals The Effect of Management Characteristics on Audit Report Readability

Economies ◽  
2022 ◽  
Vol 10 (1) ◽  
pp. 12
Author(s):  
Mahdi Salehi ◽  
Grzegorz Zimon ◽  
Maryam Seifzadeh
Keyword(s):  
Earnings Management ◽  
Significant Relationship ◽  
Fixed Effects ◽  
Stock Exchange ◽  
Favourable Effect ◽  
Fixed Effects Model ◽  
Audit Report ◽  
Listed Firms ◽  
Managerial Entrenchment ◽  
Ceo Narcissism

The present study investigates the relationship between management characteristics (managerial entrenchment, CEO narcissism, overconfidence, board effort, real and accrual-based earnings management) and the audit report readability of listed firms. In other words, this paper seeks to answer the question of “whether management characteristics can have a favourable effect on the audit report readability or not.” The multivariate regression model is used for this study. Research hypotheses were also examined using a sample of 1004 observations on the Tehran Stock Exchange during 2012–2018 and by employing multiple regression patterns based on a panel data technique and fixed effects model. The results show a negative and significant relationship between managerial entrenchment and real and accrual-based earnings management and the audit report readability, based on the FOG index, and a positive and significant relationship between management narcissism, CEO overconfidence, and board effort and the audit report readability, based on the FOG index. Moreover, a negative and significant relationship exists between management entrenchment, CEO overconfidence, real and accrual-based earnings management, and audit report readability based on text length and Flesch indices. A positive and significant relationship was evident between CEO narcissism and board effort and audit report readability based on the same indices. Besides, research models were also examined for more confidence using other additional methods, including FE, T + 1, ABB, and GMM, which confirm the study’s preliminary results. Since the present study is the first paper to investigate such a topic in the emergent markets, it provides valuable information about intrinsic and acquisitive characteristics of management for users, analysts, and legal institutions that contribute significantly to financial statement readability.

scholarly journals Related Party Transactions, Family Ownership, and Earnings Management in Indonesia

2021 ◽  
Vol 25 (3) ◽  
pp. 688-700
Author(s):  
Levina Ulfa Subastian ◽  
Ari Kuncara Widagdo ◽  
Doddy Setiawan
Keyword(s):  
Earnings Management ◽  
Stock Exchange ◽  
Management Practice ◽  
Control Variable ◽  
Family Ownership ◽  
Related Party Transactions ◽  
Discretionary Accrual ◽  
Corporate Earnings ◽  
The Relationship ◽  
Public Accountant

The purpose of earnings management practice is to reach the profit goals the company wants to achieve. Therefore, this study aims to determine the relationship between related party transactions and earnings management in Indonesia by balanced panel data from consumer goods companies listed on the Indonesia Stock Exchange (IDX) from 2017 to 2019. The number of samples used in this study was 102 firm-year observations. The results showed that related party transactions positively and significantly improved corporate earnings management, with discretionary accrual as a proxy. The presence of family ownership strengthens the relationship between related party transactions and earnings management. Also, it shows that the control variable: public accountant from BIG4, company size, company losses, and ROA affect accrual earnings management. The leverage does not affect accrual earnings management. The study result indicates that family business ownership encourages an entrenchment effect that is detrimental to the company. It is carried out through related party transactions then manipulated by using accrual earnings management practices.DOI: 10.26905/jkdp.v25i3.5778

scholarly journals THE EFFECT OF CORPORATE GOVERNANCE MECHANISM ON EARNINGS MANAGEMENT PRACTICE (Case Study on Indonesia Manufacturing Industry)

2018 ◽  
Vol 15 (2) ◽  
pp. 157-167 ◽  
Author(s):  
YULIUS KURNIA SUSANTO
Keyword(s):  
Earnings Management ◽  
Audit Committee ◽  
Manufacturing Industry ◽  
Stock Exchange ◽  
Management Practice ◽  
Company Performance ◽  
Governance Mechanism ◽  
Manufacturing Companies ◽  
Corporate Governance Mechanism ◽  
Equity Ratio

The purpose of the research is to get empirical evidence about institutional ownership, management ownership, directors’ size, audit committee, independent commissioner, leverage, profitability, firm size, auditor’s independency and auditor’s reputability on earnings management practice. This research used 53 manufacturing companies listed in Indonesia Stock Exchange and the data were collected through purposive sampling method during the research period 2009 until 2011. The result of the research showed that audit committee, independent commissioner and debt to equity ratio had influence on earnings management practice. The results of this study indicate that the audit committee and independent commissioner overseeing management in reporting of company performance through financial statements. In addition, companies that source of funding more debt than equity is more likely to make an earnings management.

TINGKAT VARIASI GENDER POSISI MANAJEMEN PUNCAK DAN KUALITAS LABA PERUSAHAAN

2010 ◽  
Vol 6 (2) ◽  
pp. 87
Author(s):  
Putriana Kristanti
Keyword(s):  
Regression Analysis ◽  
Content Analysis ◽  
Earnings Management ◽  
Stock Exchange ◽  
Top Management ◽  
Listed Firms ◽  
The Third ◽  
Gender Variation ◽  
Result Show

The purpose of this study is to analyze the relation of top management gender with  earnings management. This study analyzes a sample made of Jakarta stock exchange-listed firms. Three models used in this study, first model to measure the gender  variation, i.e. content analysis; the second model to analyze the earnings managemet,  with regression analysis; and the third model to examine the relation of top  management gender variation with earnings management, with corelation analysis. The  result show that top management gender variation is not correlated with earnings management. Keywords: top management gender, earnings management

IPO valuation using the price-multiple methods: evidence from Malaysia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Chui Zi Ong ◽  
Rasidah Mohd-Rashid ◽  
Kamarun Nisham Taufil-Mohd
Keyword(s):  
Initial Public Offerings ◽  
Stock Exchange ◽  
Least Square ◽  
Multiple Methods ◽  
Cross Sectional ◽  
Ols Regression ◽  
Content Type ◽  
Public Offerings ◽  
Ordinary Least Square ◽  
Valuation Method

Purpose This study aims to investigate the valuation accuracy of Malaysian initial public offerings (IPOs) by using price-multiple methods. Design/methodology/approach Cross-sectional data including 467 IPOs listed on the Malaysian stock exchange were used for the period of 2000–2017. This study used univariate ordinary least square (OLS) regression to analyse the relationship between IPOs’ price-multiples and comparable firms’ price-multiples. The test of valuation accuracy was conducted via computing valuation errors by segregating the sample into two groups: fixed-price IPOs and book-built IPOs. Furthermore, multiple OLS regression was used to examine the influence of IPO valuation on underpricing. Findings The findings of the results suggested that IPOs price-to-earnings (P/E), price-to-book (P/B) and price-to-sales (P/S) multiples were positively related to the median P/E, P/B and P/S multiples of five comparable firms matched by industry and revenues. The P/S multiple was shown to be the most significant valuation method, specifically in book-built IPOs. The findings indicated that those firms that had a lower valuation in comparison to the comparable firms were inclined to underprice their IPOs to allure investors to subscribe IPOs. In addition, book-built IPOs that had fair valuations were inclined to generate higher initial returns for investors. Practical implications The findings of this study observed implications for underwriters in avoiding the mis-valuation issue by considering the book-building mechanism. Originality/value This study attempted to explore the suitability of the valuation method to value IPOs in Malaysia.

The Effect of Earnings Management on Dividend Policy in Pakistan

2017 ◽  
Vol 9 (1-3) ◽  
Author(s):  
Faiza Saleem ◽  
Mohd Norfian Alifiah
Keyword(s):  
Earnings Management ◽  
Dividend Policy ◽  
Oil And Gas ◽  
Stock Exchange ◽  
Annual Data ◽  
Cross Sectional ◽  
Return On Equity ◽  
Dividend Payments ◽  
Oil And Gas Companies ◽  
The Impact

The aim of this study was to find out the impact of earnings management on dividend policy of oil and gas companies listed at the Karachi stock exchange. The study uses annual data of oil and gas companies for the period from 2008 to 2015. The dependent and independent variables are dividend policy and earnings management and the three control variables are leverage, return on equity and firm size. Modified cross sectional Jones model (1995) was used for calculating discretionary accruals which has been used as proxy for earnings management whereas measurement of dividend policy has been proxy by dividend payout. The findings from regression analysis indicate that earnings management has insignificant relationship with dividend policy of selected firms in Pakistan. Financial crisis in the world and economic decline period are the main reasons of this relationship. In the decline period the firms try to increase manipulation in earnings as a result the company starts reducing dividend payments. It is concluded that there are some other factors that may influence the pattern of dividend payment in the firms.

scholarly journals Earnings Management and Performance of IPO Firms: Evidence from India

2019 ◽  
Vol 12 (1) ◽  
pp. 39-58
Author(s):  
Deepa Mangala ◽  
Mamta Dhanda
Keyword(s):  
Earnings Management ◽  
Initial Public Offerings ◽  
Coming Out ◽  
Developed Countries ◽  
Annual Reports ◽  
Financial Reports ◽  
Public Issues ◽  
Public Offerings ◽  
Long Run ◽  
Earnings Performance

Disclosure through corporate annual reports is intended to enhance transparency and reduce information asymmetry during public issues. Ritter (1991) revealed that there is something fishy in the financial reports of the companies coming out with public issues. Earnings management has been recognised as a foremost contributor to such misleading financial reports. The short term overperformance of initial public offerings (IPO) of companies increases the expectations of potential investors and leads to a subsequent decline of performance in long run leaving the investors in distraught. The observed phenomenon is omnipresent and thus affects the investors across the globe. The present article empirically investigates the presence of earnings management in IPOs in India. The study is based on Modified Jones Model, the best known model to measure accruals earnings management. Preliminary results exhibit that earnings management in Indian IPOs is much higher than in developed countries. The study further discovers that the earnings performance of IPO companies is abnormally higher in IPO year as compared with post-offer period. Both the results taken together reinforce that post-issue earnings performance is a derivation of issue year earnings management in India.

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