scholarly journals HUBUNGAN KOMPLEMENTER ANTARA MANAJEMEN PUNCAK PEREMPUAN DAN LITERASI KEUANGAN TERHADAP EARNINGS MANAGEMENT PADA PERUSAHAAN YANG TERDAFTAR DI BEI PERIODE 2015

2020 ◽  
Vol 13 (1) ◽  
Author(s):  
Brenda Astrid Tamara ◽  
Yie Ke Feliana
Keyword(s):  
Earnings Management ◽  
Financial Literacy ◽  
Discretionary Accruals ◽  
Top Management ◽  
Cross Sectional ◽  
Study Population

The purpose of this study is to examine whether the presence of female top management and female top management with financial literacy has an impact on reducing earnings management. Earnings management is proxied by discretionary accruals and measured using the Modified Jones (1995) model on a cross-sectional version. The study population use all company that has been listed in Bursa Efek Indonesia (BEI) at 2015. The amount of company used in this study are 291 companies. The results of this study shows that there is no effect between female top management and female top management with financial literacy on the reduction of earnings management.

Impact of IPO grading on earnings management

2015 ◽  
Vol 13 (2) ◽  
pp. 142-158 ◽  
Author(s):  
Yogesh Maheshwari ◽  
Khushbu Agrawal
Keyword(s):  
Earnings Management ◽  
Initial Public Offering ◽  
Design Methodology ◽  
Discretionary Accruals ◽  
Alternative Measure ◽  
Cross Sectional ◽  
Content Type ◽  
Public Offering ◽  
The Impact ◽  
First Time

Purpose – This paper aims to examine the impact of initial public offering (IPO) grading on earnings management by Indian companies in their IPOs. Specifically, it investigates whether earnings management significantly differs in the pre-IPO grading regime and post-IPO grading regime. Further, it examines whether earnings management significantly differs between high-graded and low-graded IPOs. Design/methodology/approach – The cross-sectional modified Jones model is used to obtain the discretionary accruals, a proxy for earnings management. The impact of IPO grading on earnings management is assessed using multiple regression analysis. Findings – Earnings management is significantly lower in graded IPOs as compared to the ones that are not graded. Further, among the graded IPOs, the high-graded IPOs exhibit lower earnings management as compared to the low-graded IPOs. The findings are robust to the use of an alternative measure for discretionary accruals. Originality/value – IPO grading in India is a unique certification mechanism, introduced for the first time in any market. This paper establishes the efficacy of this mandatory certification mechanism in reducing earnings management. The findings could be valuable to issuer companies, investors and market regulators.

scholarly journals The Relationship Between Accrual-Based Earnings Management and Real Earnings Management: Reference to the Polish Capital Market

2020 ◽  
Vol 20 (2) ◽  
pp. 66-81
Author(s):  
Michał Comporek
Keyword(s):  
Earnings Management ◽  
Empirical Research ◽  
Capital Market ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Discretionary Accruals ◽  
Research Area ◽  
Real Earnings Management ◽  
Cross Sectional ◽  
The Relationship

Abstract Research background: The literature on the subject matter emphasizes the lack of empirical research on the relationships between accrual-based earnings management (AEM) and real earnings management (REM), while studies conducted so far are characterized by highly ambiguous results. Purpose: The main aim of the paper is to present the results of empirical research on the relationships between the AEM and REM practices used to create financial results in industrial public companies listed on the WSE. Research methodology: The research sample concerns 72 listed companies whose shares were traded on the Warsaw Stock Exchange (WSE) for a minimum 13 years in the adopted reference period of 2003–2017. The estimation of AEM and REM practices was made by using: the Jones model, the Kang-Sivaramakrishnan model and the Roychowdhury methodology. Results: The empirical results allowed showing the existence of a statistically significant, negative relationship between discretionary accruals and the abnormal level of an operational cash flow indicator, as well as between discretionary accruals and the total REM indicator. An in-depth cross-sectional analysis showed the existence of significantly differentiated relationships between the studied variables in individual branches of industry. Novelty: Research on the relationship between AEM and REM practices in the context of the Polish capital market has not been carried out so far, hence it can be considered a new research area in which there is a justified need to deepen theoretical and empirical research on the EM phenomenon.

scholarly journals The role of earnings management in the relationship between accruals and market value

2018 ◽  
Vol 15 (1) ◽  
pp. 236-244
Author(s):  
Nasim Aryannejad ◽  
Mohammadhossein Ghaemi ◽  
Keyhan Maham
Keyword(s):  
Earnings Management ◽  
Stock Exchange ◽  
Statistical Tests ◽  
Market Value ◽  
Discretionary Accruals ◽  
Expected Return ◽  
Cross Sectional ◽  
Selective Approach ◽  
The Relationship

The paper aims to clarify the role of earnings management in the relationship between accruals and the market value of companies. Previous studies suggest that some managers, for providing a desirable image of their performance, manage their profits through distorting cash or accruals. Consequently, investors rely on this information and estimate inaccurate stability of accruals which lead to mispricing phenomenon. Finally, the returns earned by the investors will not be equal to the expected return and thus the accrual anomaly will be created.To this aim, two hypotheses were developed and three regression models were applied to analyze the data. To analyze and estimate the models employed, the financial information of 110 companies listed on the stock exchange between years 2008 to 2014 is used. A selective approach to test the hypotheses is studying cross-sectional data.After conducting statistical tests, the results showed that discretionary accruals through which earnings management is done are improperly valued by the market, but the issue is not applicable regarding the non-discretionary accruals. Based on the close relationship between earnings management and discretionary accruals it can be found that earnings management can have an effect on the relationship between accruals and market value.

Earnings management and performance of management buyouts

2019 ◽  
Vol 45 (10/11) ◽  
pp. 1363-1381
Author(s):  
Lokman Tutuncu
Keyword(s):  
Earnings Management ◽  
Private Equity ◽  
Discretionary Accruals ◽  
Private Firm ◽  
Private Firms ◽  
Cross Sectional ◽  
Content Type ◽  
Management Buyouts ◽  
Firm Management ◽  
And Performance

Purpose The purpose of this paper is to examine the effect of pre-acquisition earnings management on the performance of private firm management buyouts. Design/methodology/approach The study examines 291 UK private firms acquired by their managers between 2004 and 2012. Earnings management is investigated by means of cross-sectional discretionary accruals models, and estimated discretionary accruals are regressed on performance changes in the three years following acquisition. Findings Management buyouts of private firms are preceded by earnings overstatement and followed by performance deterioration. Private equity sponsored firms engage less in earnings management and remain more profitable than non-sponsored buyouts. Upward earnings managers cease to outperform industry after second post-buyout year, while aggressive earnings managers do not outperform industry at all. Discretionary total accruals are inversely associated with performance changes in the three years after buyout, and explain over 4 per cent of the changes in performance. Research limitations/implications Pertinent to the utilisation of private firms and their exemption from publishing cash flow statement, the study relies on accrual-based models for tests of earnings management. Originality/value The paper contributes to the mergers and acquisitions literature and value creation debate in buyouts by providing the first tests of earnings management and post-acquisition performance in private firm management buyouts.

scholarly journals External auditor’s analytical procedures and their impact on discovering material misstatements

2020 ◽  
Vol 71 (3) ◽  
pp. 271-300
Author(s):  
Abdul Razzak Alshehadeh ◽  
Abdallah Atieh
Keyword(s):  
Earnings Management ◽  
Commercial Banks ◽  
Financial Statements ◽  
Discretionary Accruals ◽  
Multivariate Linear Regression Model ◽  
Independent Variables ◽  
Study Population ◽  
External Auditor ◽  
Analytical Procedures ◽  
The Impact

This study aims to identify the impact of the external auditor’s analytical procedures on the financial statements and reports for the detection of material misstatements of the Jordanian commercial banks. The impact of independent variables (profitability, liquidity, capital solvency and the employment of funds ratios) on the dependent variable (the detection of material misstatements) was measured. The dependent variable is represented by the earnings management, which is measured by the discretionary accruals. The quantitative standard method was used to analyse the financial statements and analytical procedures; moreover, the Jones Model was used to measure earnings management. Additionally, the multivariate linear regression model was used to test the hypothesis of the study, and to indicate the relationships between the variables. The study population consisted of five Jordanian commercial banks. The data was collected from 2011 to 2017. This study concluded that there is no statistically significant impact of the analytical procedures relating to the ratios of liquidity, profitability, solvency, and employment of funds that the external auditor could undertake to discover material misstatement of the financial statements of Jordanian commercial banks. Finally, the study recommended that auditors should be highly competent and deeply knowledgeable in using the analytical procedures to judge the fairness of financial data and be free of material misstatements.

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.

scholarly journals Earnings Management and Dividend Policy: Testing Audit Quality for the Moderating Effect

2021 ◽  
Vol 5 (1) ◽  
pp. 45-54
Author(s):  
ASIF ZEB ◽  
DR. ARIF HUSSAIN ◽  
DR. ALAM RAHMAN
Keyword(s):  
Earnings Management ◽  
Dividend Policy ◽  
Audit Quality ◽  
Stock Exchange ◽  
Manufacturing Sector ◽  
Discretionary Accruals ◽  
Moderating Effect ◽  
Earning Management ◽  
Cross Sectional ◽  
Policy Testing

The study is about the moderating effect of audit quality on the relationship between earning management and dividend policy in manufacturing sector of Pakistan. Firms listed in Pakistan Stock Exchange (PSE) have been considered to investigate the effect of earnings management on dividend policy from 2010 to 2016 in Pakistan. The dividend policy is calculated by dividend payout ratio whereas the discretionary accruals have been used for the measurement of earning management and this is taken as a proxy to estimate the earning management. The modified cross sectional model is adopted to quantity discretionary accruals. From the analysis, it is concluded that earning management has influence on dividend policy which rejects null hypothesis of the study. The regression coefficients explain that the connection is too weak that it is most near to no connection. The reason of this no connection or influence is financial decline time period, as earning management varies annually.

Book-tax differences: are they affected by equity-based compensation?

2015 ◽  
Vol 28 (3) ◽  
pp. 300-318 ◽  
Author(s):  
Chunwei Xian ◽  
Fang Sun ◽  
Yinghong Zhang
Keyword(s):  
Earnings Management ◽  
Design Methodology ◽  
Discretionary Accruals ◽  
Tax Planning ◽  
Managerial Discretion ◽  
Cross Sectional ◽  
Content Type ◽  
Equity Incentives ◽  
Alternative Measures ◽  
High Level

Purpose – This study aims to investigate the moderating effect of equity-based compensation on the sources of book-tax differences. The authors investigate whether equity-based compensation affects the association between book-tax differences and tax planning, and the association between book-tax differences and earnings management. Design/methodology/approach – The authors use a sample of 9,024 firm-year observations (913 firms) spanning the period 1992-2011, obtained from ExecuComp and Compustat. They estimate cross-sectional regressions of the proxy for tax planning, discretionary accruals and their interactions with equity-based compensation on book-tax differences. Findings – The authors find that tax planning-related book-tax differences increase as the equity-based pay of executives does, and that earnings management-related book-tax differences decrease as the equity-based pay of executives increases. The results are robust across three alternative measures of tax planning. Originality/value – Equity-based compensation plays an important role in managerial discretion on tax planning and earnings management. The findings suggest that, although equity incentives promote a high level of both tax planning and earnings management, they motivate managers to constrain the level of earnings management to avoid larger book-tax differences.

Ownership structure and earnings management: evidence from Jordan

2016 ◽  
Vol 24 (2) ◽  
pp. 135-161 ◽  
Author(s):  
Ebraheem Saleem Salem Alzoubi
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Least Squares ◽  
Financial Reporting ◽  
Ownership Structure ◽  
Reporting Quality ◽  
Discretionary Accruals ◽  
Financial Reporting Quality ◽  
Cross Sectional ◽  
Content Type

Purpose The purpose of this paper is to examine the association between internal corporate governance mechanism and earnings management of Jordanian companies. More specifically, the author examines several hypotheses regarding the relationships between ownership and earnings management. Design/methodology/approach This study measures the magnitude of discretionary accruals as a proxy for earnings management using the cross-sectional modified Jones model. A number of econometric techniques are used including ordinary least squares and generalized least squares to test the relationship between company ownership and earnings management, using a sample of 62 companies listed on the Amman Stock Exchange. Findings The results revealed that insider managerial ownership, institutional ownership, external blockholder, family ownership and foreign ownership have superior influence on financial reporting quality, as it is, to a greater extent, potentially able to curtail earnings management. The findings contended that the aspects of ownership structure have a significant influence on earnings management, which is in agreement with the theories of corporate governance and opinions that have been highlighted through a number of international bodies. Research limitations/implications Due to lack of data, the paper depends on cross-sectional data applied to isolate abnormal accruals. Practical implications The evidence may be conceivably beneficial as a supporting fundamental for regulatory action, particularly those that affect the ownership structure. The findings have significant implications for regulators as well as supervisors, who will benefit by the comprehension of how ownership structure affects earnings management and enhance financial reporting quality. Originality/value The current research produced its essential contribution through empirically displaying that ownership structure has different implications on earnings management. Moreover, the results recommended that both policymakers and researchers would no longer contemplate ownership structure as a whole, given that ownership structure has different implications on earnings management, measured by the discretionary accruals.

Access of Key Population to Available HIV and TB Services in Nepal: A Cross Section Study

2019 ◽  
Vol 17 (1) ◽  
pp. 17-23
Author(s):  
B.B. Subba ◽  
N. Rimal ◽  
B.M. Shrestha
Keyword(s):  
Viral Load ◽  
Cross Section ◽  
General Knowledge ◽  
Cross Sectional Survey ◽  
Cross Sectional ◽  
Key Population ◽  
Mdr Tb ◽  
Study Population ◽  
Control And Management ◽  
Structured Questionnaire

Introduction: TB is considered one of the opportunistic infection among PLHIV. The increasing burden of HIV/TB co-infection among key population cause problem to maintain adherence to ART and DOTS services. The emergence of MDR-TB is one of the greatest challenge to control and management of both diseases. However, having knowledge and information of both diseases are important role to access the available HIV/TB services. Methods: A cross-sectional survey was conducted among key population who had HIV/TB co-infection in two-epidemic zone of Nepal. A pretested semi-structured questionnaire was used to collect data. ANOVA test was done to analyze the collected data by using SPSS version 20.0. Results: A total of 343 HIV/TB co-infected individuals were enrolled to the study. Most of participants were from ART and DOTS clients. Therefore, the study found that there was significance difference found between knowledge about TB (F=4.400, p= 0.005), causative agent of TB (F=3.160, p=0.025), risk of TB illness among PLHIV (F=8.491, p=0.001) and among key affected population. Moreover, there was significance difference found between access to OI treatment (F=5.113, p=0.002) and access to viral load (F=4.642, p=0.003) among key study population. In gender perspective, there was no significance difference to use and access to available HIV/TB services. Conclusion: The general knowledge on HIV/TB co-infection was significant association with key population. The knowledge on HIV/TB and access to NGOs’ help can significant effect to access the available HIV and TB services.

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