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 RELATIONSHIP BETWEEN FAMILY OWNERSHIP, AGENCY COSTS TOWARDS FINANCIAL PERFORMANCE AND BUSINESS STRATEGY AS MEDIATION

2018 ◽  
Vol 19 (0) ◽  
pp. 49-58
Author(s):  
Enni Savitri
Keyword(s):  
Financial Performance ◽  
Business Strategy ◽  
Agency Costs ◽  
Stock Exchange ◽  
Partial Least Square ◽  
Least Square ◽  
Business Strategies ◽  
Family Ownership ◽  
Manufacturing Companies ◽  
The Relationship

This study investigates the relationship between family ownership, agency costs, financial performance, and companies’ business strategies. The targeted population of this study were all 143 manufacturing companies listed on the Indonesia Stock Exchange (IDX) during 2007–2014. About 31% (45) of these manufacturing companies are family companies. The hypotheses were tested using the partial least-square (PLS) method. Our findings reveal that the companies’ business strategies are not affected by the family ownership. Family ownership and business strategies influence companies’ financial performance. Agency costs influence business strategy and financial performance, and this shows that agency costs contribute to both the increase and decrease of financial performance. Business strategy mediates the relationship between family ownership and financial performance. This shows that family companies do not concentrate on financial goals but rather on the sustainability. Business strategy influences the relationship between agency costs and financial performance. This shows that funds can be redistributed in the course of business strategy planning, which will, in turn, improve the company’s development.

scholarly journals Ownership Structure and earnings management: Empirical evidence from listed pharmaceuticals and chemical firms of Bangladesh

2020 ◽  
Vol 5 (2) ◽  
pp. 58-69
Author(s):  
Dewan Azmal Hossain
Keyword(s):  
Earnings Management ◽  
Empirical Evidence ◽  
Ownership Structure ◽  
Good Governance ◽  
Foreign Ownership ◽  
Jel Classification ◽  
Financial Information ◽  
Least Square ◽  
The Relationship

Objective – This study aims to examine the relationship between ownership structure (determined by institutional and foreign ownership) and earnings management in the context of Bangladeshi Pharmaceuticals and Chemical firms. Methodology/Technique – Out of 32 listed firms, this study examined 29 firms from the pharmaceuticals and chemical industry of Bangladesh from 2014 to 2018. Three firms are omitted as they got listed in 2018 and 2019 respectively. This study uses discretionary working capital accrual to measure earnings management that is the dependent variable. Ordinary least square regression analysis is conducted to assess the result of this study. Institutional and foreign ownership are independent variables. ROA, size, cash flow from operation, and leverage are control variables. Findings – It is found that institutional ownership is negatively related to earnings management and foreign ownership is positively related to earnings management but none of them are statistically significant indicating institutional and foreign ownership do not help in resolving or reducing the earnings management problems in the context of Bangladeshi pharmaceuticals and chemical firms. Novelty – Previous studies in Bangladesh deal only with the techniques of earnings management. To my knowledge, it is the first study that tries to assess the relationship of ownership structure defined by institutional and foreign shareholdings with earnings management in the context of Bangladeshi pharmaceuticals and chemical firms. These two ownership patterns are selected because they are supposed to increase the quality of financial information and also because in Bangladesh state and general shareholders are too dispersed to monitor the governance issues. The practical implications of this study is that investors should not consider institutional and foreign ownership percentage as a determining factor of good governance when considering investment decisions rather should look for other firm-specific factors as institutional and foreign shareholders are found to be inactive in increasing the quality of financial information in the context of Bangladesh. Policymakers should identify why institutional and foreign shareholders are not active and should revise the governance mechanisms accordingly. Type of Paper: Empirical Keywords: Ownership structure; Institutional Shareholdings; Foreign Shareholdings; Earnings Management; Bangladesh. Reference to this paper should be made as follows: Hossain, D.A. 2020. Ownership Structure and earnings management: Empirical evidence from listed pharmaceuticals and chemical firms of Bangladesh, J. Fin. Bank. Review, 5 (2): 58 – 69 https://doi.org/10.35609/jfbr.2020.5.2(3) JEL Classification: G40; G41; G49.

scholarly journals The Role of Related Party Transaction and Earning Management in Reducing Tax Aggressiveness

2019 ◽  
Vol 4 (3) ◽  
pp. 134-145
Author(s):  
Masna Ellyani ◽  
Ataina Hudayati
Keyword(s):  
Structural Equation ◽  
Stock Exchange ◽  
Equation Model ◽  
Partial Least Square ◽  
Least Square ◽  
Earning Management ◽  
Positive Role ◽  
Tax Aggressiveness ◽  
The Relationship

This study aimed to examine the influence of related party transactions (RPT) on tax aggressiveness by using earning management as an intervening variable. This study was performed based on the perception that RPT is a positive practice and it is predicted to decrease tax aggressiveness. Besides aiming to find empirical evidence of positive role of RPT in the field of taxation, this study also aimed to test the positive role of earning management in reducing tax aggressiveness. The population of this study was 47 of manufacturing company registered on the Indonesia Stock Exchange for the period of 2014-2016 having transactions with related party (RPT). The analysis method of this study was structural equation model using Partial Least Square (PLS) software. This findings supported the hypothesis that RPT and earning management negatively affects tax aggressiveness. The results of the study also showed that earning management mediate the relationship between RPT and tax aggressiveness.Keywords: RPT, tax aggressiveness, earning management 

scholarly journals Risk Profile, Secure Bond, and Bond Rating in Banking Industry

The Winners ◽  
2020 ◽  
Vol 21 (1) ◽  
pp. 49
Author(s):  
Erin Wijayanti ◽  
Indah Yuliana
Keyword(s):  
Banking Industry ◽  
Stock Exchange ◽  
Risk Profile ◽  
Partial Least Square ◽  
Least Square ◽  
Bond Ratings ◽  
Bond Rating ◽  
The Impact ◽  
The Relationship ◽  
Positive Effect

The research aimed to assess the impact of the Risk Profile on the banking industry bond ratings in Indonesia Stock Exchange (IDX) and have a rating for bonds at PT PEFINDO. Sampleswere selected by purposive sampling method. The population were banks listed on the Indonesia Stock Exchange in 2015-2018. The population was 44 banks and 16 banks were selected as samples. The analysis a used descriptive statistics and Partial Least Square (PLS) for testing structural and structural models. The results show that Non-Performing Loan (NPL)and Loan to Deposit Ratio (LDR) directly have a significant direct positive effect on bond ratings, and security directly do not have a significant effect on bond ratings, security strengthen risk relationships credit with a bond rating. However, security weakens the relationship between liquidity risk and the bond rating. The variables indicate that these variables can explain the bond rating of 44,4% while the remaining 55,6% is influenced by other variables not contained in the research model.

scholarly journals Executives Compensation Impact Toward Shareholder Wealth: Company Performance (Empirical Study of Listed Companies in Indonesia Stock Exchange and Categorized as LQ45 Index)

2020 ◽  
Vol 4 (1) ◽  
pp. 91-111
Author(s):  
Ananto Prabowo ◽  
Devinta Palupi Indah Sari
Keyword(s):  
Sampling Method ◽  
Stock Exchange ◽  
Shareholder Wealth ◽  
Partial Least Square ◽  
Least Square ◽  
Company Performance ◽  
Partial Least Square Analysis ◽  
Inner Model ◽  
Independent Variable ◽  
The Relationship

This research aimed to examine the relationship between executives compensation toward shareholder wealth with company performance as a moderating variable. The first is to examine whether executives compensation influences company performance. Secondly, it examines whether executives compensation influences shareholder wealth. Thirdly, it examines whether company performance influences shareholder wealth. Lastly is to examine whether executives compensation influences shareholder wealth with company performance as moderating variable. The populations in this research are using the company that listed in Indonesia Stock Exchange (IDX) and categorized as LQ45 index that falls from 2013-2015. This research uses a purposive sampling method to collect a sample. The sample selected was analyzed using PLS (Partial Least Square) analysis which is an outer model and inner model. The results of this study show that executives compensation does not have a role to determine company performance. The second result shows that executives compensation has positive and influence shareholder wealth significantly. Another result shows that company performance has positive and influence shareholder wealth significantly. The last result shows that company performance is not a moderating variable in the relationship between executives compensation and shareholder wealth. Company performance is an independent variable that has a positive and significant relationship with shareholder wealth

scholarly journals VALUE RELEVANCE OF ACCOUNTING INFORMATION AND SHARE PRICE: AN EMPIRICAL STUDY ON MANUFACTURING FIRMS IN NIGERIA

2020 ◽  
pp. 64-77
Author(s):  
OC Ogbodo ◽  
Benjamin Osisioma
Keyword(s):  
Value Relevance ◽  
Stock Exchange ◽  
Accounting Information ◽  
Manufacturing Firms ◽  
Least Square ◽  
Share Price ◽  
Manufacturing Companies ◽  
Causality Test ◽  
Ex Post ◽  
Ex Post Facto

This study assessed the relationship between the value relevance of accounting information and share price with a focus on manufacturing companies listed on the Nigerian Stock Exchange (NSE). The Ex-post facto research design was used. Ordinary Least Square (OLS) regression analysis and Granger Causality test was used to test the hypothesis with the aid of E-View 9.0. The results of this study revealed that there is a significant positive relationship between Dividend per Share and the Share Price. The researcher recommends among others that standard setters, the stock market regulators and listed manufacturing firms in Nigeria should continuously devise ways of improving the quality of accounting information published in financial statements to maintain and increase their value relevance to the investors and other stakeholders.

scholarly journals An Indonesian Empirical Study of The Relationship between Firm’s Intellectual Capital, Financial Performance and Market Value

2020 ◽  
Vol 9 (4) ◽  
pp. 451-458
Author(s):  
Debby Andria Silviani ◽  
Vitradesie Noekent
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Stock Exchange ◽  
Market Value ◽  
Sampling Technique ◽  
Partial Least Square ◽  
Least Square ◽  
Testing Tool ◽  
Version 2.0 ◽  
The Relationship

The purpose of this study is to explain the effect of Intellectual Capital on the company’s financial performance and market value. The population used in this study are all large trasing subsector companies listed on the Indonesia Stock Exchange during the 2009-2018 studi period. The sampling technique in this study uses a purposive sampling technique that uses criteria that have been determined by researches in order to obtain a sample of 13 companies. The testing tool used is Partial Least Square (PLS) version 2.0. The result of this study indicate that there is a positive and significant influence of intellectual capital on the company’s financial performance and intellectual capital also has a positive and significant on the company’s market value.The suggestion in this research is companie wish to consider the use of intellectual capital to improve financial performance and market value of the company.

scholarly journals i, The Impact of Adoption of IFRS 9 on the Value Relevance Accounting Information for the Companies Listed in ISX

2021 ◽  
Vol 11 (3) ◽  
Author(s):  
Prof Dr Bushra Najem Aubdullah Al- Mashhadan ◽  
Prof Dr Bushra Najem Aubdullah Al- Mashhadan
Keyword(s):  
Value Relevance ◽  
Stock Exchange ◽  
Accounting Information ◽  
Financial Statements ◽  
Book Value ◽  
Earnings Information ◽  
Income Statement ◽  
Ifrs 9 ◽  
The Impact ◽  
The Relationship

This research aims to know the effect of adopting IFRS 9 on the relevance of the value of the accounting information of the companies in the Iraqi Stock Exchange. Researchers relied on analyzing the financial statements of 10 listed companies for years 2016 – 2019. Researchers used the Ohlson price model to test the relationship between accounting information and value relevance. The research indicated that there is a significant relationship between the adoption of IFRS 9 and the relevance of the value of the earnings and the book value, but the earnings information is more relevance than the book value information, it is due to the interest of investors in the income statement in making investment decisions.

scholarly journals The Influence of audit committee and internal audit on audit report lag

2020 ◽  
Vol 9 (1) ◽  
pp. 137-142
Author(s):  
Ratna Juwita ◽  
Sutrisno Sutrisno T ◽  
Bambang Hariadi
Keyword(s):  
Audit Committee ◽  
Stock Exchange ◽  
Internal Audit ◽  
Partial Least Square ◽  
Least Square ◽  
Manufacturing Companies ◽  
Audit Report ◽  
Public Accounting ◽  
Accounting Firm ◽  
The Relationship

This study aims to examine the effect of the audit committee and internal audit on the audit report lag and examine the relationship between the audit committee and the internal audit moderated by the size of a public accounting firm. This study uses 220 samples of manufacturing companies listed on the Indonesia Stock Exchange based on purposive sampling. The analytical method used is Partial Least Square (PLS). The results show that the audit committee influences the audit report lag while the internal audit has no effect. The size of a public accounting firm successfully moderated the relationship between the audit committee and audit report lag, but failed to moderate the relationship between the internal audit and audit report lag

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