Commitment to IT Investment Plans: The Interplay of Real Earnings, Management, IT Decentralization, and Corporate Governance

MIS Quarterly ◽  
2020 ◽  
Vol 45 (1) ◽  
pp. 193-224
Author(s):  
Ling Xue ◽  
Sunil Mithas ◽  
Gautam Ray
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Real Earnings Management ◽  
It Investment

scholarly journals Political and financial background in board interlocking and earnings management in Brazil

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Cristian Baú Dal Magro ◽  
Roberto Carlos Klann
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Financial Reporting ◽  
Management Practices ◽  
Accounting Information ◽  
Real Earnings Management ◽  
The Political ◽  
Content Type ◽  
Quality Of Accounting Information

Purpose Although board interlocking underlying forces are largely hidden, the purpose of this paper is to provide managers, auditors, analysts, regulators and other stakeholders with sociological board interlocking information considering the different backgrounds of their members. Design/methodology/approach The research sample gathered 1,606 observations from 2010 to 2017. For data analysis, the direct and indirect board interlocking linkages, considering the different backgrounds of board members, established the centrality indicators. Subsequently, the authors used these indicators according to each measured background in the regression models. Findings The results indicate that the political background of board interlocking members is positively related to real earnings management practices, while the financial background has a mitigating effect on such practices. Research limitations/implications The findings suggest that individual skills and interests conveyed across the corporate social network have shaped corporate governance, with distinct impacts on the quality of accounting information. Practical implications The authors conclude that both backgrounds could have implications on agency conflicts, increasing (policy) or reducing (financial) information asymmetry between the company and its various stakeholders, which indicates that the authors must consider sociological and not just economic aspects within corporate governance. Social implications The sociological background of individuals is necessary for the congruence of monitoring mechanisms, and consequently, the quality of accounting information. Originality/value This study examines the influence of the political and financial background of board interlocking members on real earnings management practices in Brazilian publicly traded companies in the International Financial Reporting Standards post-adoption period.

scholarly journals The effect of financial distress and earnings management on tax aggressiveness with corporate governance as the moderating variable

2020 ◽  
Vol 9 (7) ◽  
pp. 167-176
Author(s):  
Ratih Pujirahayu Nugroho ◽  
Sutrisno T Sutrisno ◽  
Endang Mardiati
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Financial Distress ◽  
Stock Exchange ◽  
Real Earnings Management ◽  
Audit Committees ◽  
Manufacturing Companies ◽  
Sample Collection ◽  
Financial Reports ◽  
Tax Aggressiveness

This study aims to verify the correlation between financial distress and earnings management of tax aggressiveness moderated by corporate governance. This study uses a population of manufacturing companies that publish their financial statement on the Indonesia Stock Exchange from 2017 until 2018. Sample collection was performed using a purposive sampling method, resulting in a total of 212 populations that published complete financial reports. This study was tested by using the Multiple Regression Analysis test. This research gave empirical proofs that financial distress and real earnings management positively influenced the tax aggressiveness was supported, the proportion of independent commissioners weakened the financial distress and negatively impacted the tax aggressiveness was supported, the total audit committees weakened the financial distress and negatively influenced the tax aggressiveness was not supported, the proportion of independent commissioners and total audit committees weakened the real earnings management and negatively affected the tax aggressiveness was not supported

scholarly journals CORPORATE GOVERNANCE DAN MANAJEMEN LABA RIIL PERBANKAN ISLAM INDONESIA DAN MALAYSIA

2018 ◽  
Vol 7 (4) ◽  
Author(s):  
M. Zubaedy Sy ◽  
Nuryati Nuryati ◽  
Surifah Surifah
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Audit Committee ◽  
Stock Exchange ◽  
Cash Flows ◽  
Profit Sharing ◽  
Least Square ◽  
Real Earnings Management ◽  
Annual Reports ◽  
Islamic Banks

 The main objective of this research is to create good corporate governance that is able to restrictopportunistic REM. The specific objectives of this study are 1) to provide evidence of difference inthe practices of CG and REM in Indonesian and Malaysian Islamic banks,and 2) to provide empirical evidence of the influence of CG on the REM of Indonesian and Malaysian Islamic banks.           The study was conducted on Indonesian and Malaysian Islamic banks from 2011 to 2016by using purposive samplingmethod. The research data is secondary data in the form of annual reports and financial reports originating from the Indonesian Banking Directory, the Indonesia Stock Exchange and the Malaysia Stock Exchange. The analysis method used to test the differences between CG and real earnings management is the Man Whitney test whilethe method used to test the effect of CG on the REM of Islamic Banks in Indonesia and Malaysia is the multiple regression analysiswithordinary least square.            The results show that the practices of corporate governance in Indonesia and Malaysia have their own strengths and weaknesses. CG mechanism of Indonesia and Malaysia shows lower level in some parts and higher level in other parts. Malaysia’s REM islower than Indonesia’sREM through operating cash flow, investment profit sharing, and discretionary costs. The experimental results show that CG generally does not affect real earnings management and only the independent audit committee who is able to restrictreal earnings management through operating cash flows.            Riset ini  menguji  hubungan antara corporate governance (CG) dan manajemen laba berdasar aktivitas riil  atau disebut real earnings management (REM) bank-bank Islam  di Indonesia dan Malaysia. Tujuan jangka panjang riset ini adalah terciptanya good corporate governace yang mampu membatasi REM oportunistik. Target khusus penelitian ini adalah 1) memberi bukti empiris perbedaan praktik CG dan REM bank Islam  Indonesia dan Malaysia. 2) memberi bukti empiris pengaruh CG terhadap REM bank Islam  Indonesia dan Malaysia.             Metode penelitian menggunakan metode ilmiah - kuantitatif, dengan membangun satu atau lebih hipotesis berdasarkan pada suatu struktur  atau kerangka teori dan kemudian menguji hipotesis-hipotesis tersebut secara empiris. Penelitian dilakukan pada bank Islam  Indonesia dan Malaysia periode waktu 2011 sampai 2016. Metode pengambilan sampel secara purposive sampling. Data penelitian merupakan data sekunder berupa  annual report dan laporan keuangan yang berasal dari Directory Perbankan Indonesia, Bursa Efek Indonesia  dan Bursa Efek Malaysia.  Teknik analisis untuk menguji perbedaan CG dan manajemen laba riil adalah uji beda Man Whitney, sedangkan untuk menguji pengaruh CG terhadap REM Bank Islam  Indonesia dan Malaysia menggunakan analisis regresi berganda ordinary least square.            Hasil menunjukkan bahwa praktik corporate governance Negara Indonesia dan Malaysia, masing masing memiliki kelebihan dan kelemahan. Mekanisme CG ada yang lebih rendah, maupun lebih tinggi antara Negara Indonesia dengan Malaysia. REM Malaysia lebih rendah signifikan dari pada Indonesia, baik melalui arus kas operasi, bagi hasil investasi, maupun biaya diskresioner. Hasil uji menunjukkan bahwa pada umumnya mekanisme CG tidak berpengaruh terhadap manajemen laba riil. Hanya Independensi komite audit yang mampu menekan manajemen laba riil melalui arus kas operasi.Keywords:Corporate governance, real earnings management, Islamic banking.

scholarly journals The impact of ownership type on the relationship between corporate governance and earnings management: An empirical study

2019 ◽  
Vol 16 (4) ◽  
pp. 31-44
Author(s):  
Ahmed Boghdady
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Cash Flows ◽  
Real Earnings Management ◽  
Ownership Type ◽  
Moderation Effect ◽  
Corporate Governance Mechanisms ◽  
The Impact ◽  
The Relationship ◽  
Privately Owned

This study investigates the effect of ownership type on the relation between corporate governance and earnings management. While previous literature has mainly examined the relationship between corporate governance and both accrual and real earnings management, no study to date, to the researcher’s best knowledge, focused on the moderation effect of ownership type on this relationship. Three proxies for measuring accrual and real earnings management, namely discretionary accruals (DA), abnormal cash flows (ACFO), and abnormal discretionary expenses (ADISX) are employed. Three empirical models (i.e. DA, ACFO, and ADISX) are developed in which the earnings management proxies represent the dependent variables and are tested using a sample of non-financial companies containing state-owned and privately owned companies over the period from 2010 to 2017, with 1030 firm-year observations. The results show a positive relationship between ownership type and both accruals manipulation and sales manipulation. In general, the results suggest that the ownership type moderates the relationship between corporate governance and earnings management. The results suggest also that corporate governance mechanisms may not play an almost the same role in monitoring and mitigating real earnings management (REM) practices as they do for accrual earnings management (AEM) in Egypt. Moreover, no evidence is found supportive of the trade-off effect which means that managers in Egyptian firms use both types of earnings management jointly to reach the target levels of earnings

The Effect of Board of Director Composition and Audit Committee Expertise on The Real Earnings Management in Indonesia

2020 ◽  
Vol 2 (1) ◽  
pp. 110-117
Author(s):  
Feby Astrid Kesaulya ◽  
Weny Putri ◽  
Dewi Sri
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Audit Committee ◽  
Good Governance ◽  
Real Earnings Management ◽  
The Real ◽  
Board Of Director ◽  
Good Corporate Governance ◽  
Board Director ◽  
Real Activities Manipulation

The Objective of this research was to prove that the implementation of good corporate governance will have an effect on the real activities manipulation which was done by the management. The implementations of good governance used by this research are board of director composition and audit committee expertise. This research was conducted in Indonesia by using 306 firm years’ observations. The result of this research showed a different result from previous researches. This research showed that the implementation of good corporate governance in the form of board director composition and audit committee expertise do not impact the practice of real activities manipulation. Or, in other words some of the good corporate governance tool could not mitigate the real activities manipulation in the company.

Audit committee effectiveness, audit quality and earnings management: a meta-analysis

2016 ◽  
Vol 58 (2) ◽  
pp. 179-196 ◽  
Author(s):  
Zgarni Inaam ◽  
Halioui Khamoussi
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Audit Committee ◽  
Audit Quality ◽  
Good Governance ◽  
Meta Analysis ◽  
Negative Relationship ◽  
Real Earnings Management ◽  
Institutional Setting ◽  
Content Type

Purpose – Many researchers, in several contexts, have investigated the influence of audit committee effectiveness and audit quality variables on reducing the extent of earnings management, and empirical evidence is rather inconsistent. Design/methodology/approach – The aim of this paper is to meta-analyze the results of 58 prior studies that examined whether differences in results are related to moderating effects associated with corporate governance mechanisms or measures of earnings management. Findings – The findings show that the meta-analysis identifies many significant relationships. The independence of the audit committee, its size, expertise and the number of meetings have a negative relationship with earnings management. Similar negative relationships exist between auditor size, specialization and earnings management. Research limitations/implications – This study contributes to the corporate governance literature. Further, recognizing the function of an audit committee and audit quality shows the value of considering an institutional setting in governance research. This study is significant to academic and practitioner literatures, policy makers and professional accounting bodies as it shows that governance reforms promote companies to adopt good governance practices. The results also give useful information to investors in examining the effect of audit committee characteristics and audit quality on earnings quality. Originality/value – This study extends existing research on audit committee and audit quality to oversee both accrual and real earnings management using meta-analysis. Thus, this study has the potential to help stakeholders, board of directors, regulators and auditors, who are related with enhancing the supervision of firms and reducing the opportunities given to managers, to engage in earnings management.

scholarly journals Board characteristics and earnings management in Sri Lanka

2019 ◽  
Vol 27 (1) ◽  
pp. 2-18
Author(s):  
Shanmugavel Rajeevan ◽  
Roshan Ajward
Keyword(s):  
Corporate Governance ◽  
Sri Lanka ◽  
Earnings Management ◽  
Management Practices ◽  
Stock Exchange ◽  
Governance Structure ◽  
Real Earnings Management ◽  
Content Type ◽  
Board Characteristics ◽  
Market Capitalisation

Purpose The purpose of this paper is to examine the association between designated corporate governance attributes and the degree of earnings management in selected quoted companies in Sri Lanka. Design/methodology/approach In total, 70 listed companies in Colombo Stock Exchange (CSE) were selected based on the highest market capitalisation for the period covering from 2015 to 2017 and representing beverage, food and tobacco, diversified, hotel and travel, manufacturing, oil palms and health care sectors, which accounted for 59.9 per cent of the total market capitalisation of CSE. Findings This study found a positive relationship between CEO-Chair duality and earnings management. Practical implications The insights may also provide investors, economic analysts and regulators with early caution indicators of potential problems in a corporation regarding corporate governance failures and aid stakeholders in assessing the effectiveness and efficiency of the board and corporate governance structure and earnings management methods. Originality/value This study extends the extant research on board characteristics and real earnings management by adopting prominent research design and modernised data. This study offers evidence on how selected audit and board committee’s characteristics influence real earnings management practices.

scholarly journals CORPORATE GOVERNANCE DAN MANAJEMEN LABA RIIL PERBANKAN ISLAM INDONESIA DAN MALAYSIA

2018 ◽  
Vol 7 (4) ◽  
Author(s):  
M. Zubaedy Sy ◽  
Nuryati Nuryati ◽  
Surifah Surifah
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Audit Committee ◽  
Stock Exchange ◽  
Cash Flows ◽  
Profit Sharing ◽  
Least Square ◽  
Real Earnings Management ◽  
Annual Reports ◽  
Islamic Banks

The main objective of this research is to create good corporate governance that is able to restrictopportunistic REM. The specific objectives of this study are 1) to provide evidence of difference inthe practices of CG and REM in Indonesian and Malaysian Islamic banks,and 2) to provide empirical evidence of the influence of CG on the REM of Indonesian and Malaysian Islamic banks.           The study was conducted on Indonesian and Malaysian Islamic banks from 2011 to 2016by using purposive samplingmethod. The research data is secondary data in the form of annual reports and financial reports originating from the Indonesian Banking Directory, the Indonesia Stock Exchange and the Malaysia Stock Exchange. The analysis method used to test the differences between CG and real earnings management is the Man Whitney test whilethe method used to test the effect of CG on the REM of Islamic Banks in Indonesia and Malaysia is the multiple regression analysiswithordinary least square.            The results show that the practices of corporate governance in Indonesia and Malaysia have their own strengths and weaknesses. CG mechanism of Indonesia and Malaysia shows lower level in some parts and higher level in other parts. Malaysia’s REM islower than Indonesia’sREM through operating cash flow, investment profit sharing, and discretionary costs. The experimental results show that CG generally does not affect real earnings management and only the independent audit committee who is able to restrictreal earnings management through operating cash flows.            Riset ini  menguji  hubungan antara corporate governance (CG) dan manajemen laba berdasar aktivitas riil  atau disebut real earnings management (REM) bank-bank Islam  di Indonesia dan Malaysia. Tujuan jangka panjang riset ini adalah terciptanya good corporate governace yang mampu membatasi REM oportunistik. Target khusus penelitian ini adalah 1) memberi bukti empiris perbedaan praktik CG dan REM bank Islam  Indonesia dan Malaysia. 2) memberi bukti empiris pengaruh CG terhadap REM bank Islam  Indonesia dan Malaysia.             Metode penelitian menggunakan metode ilmiah - kuantitatif, dengan membangun satu atau lebih hipotesis berdasarkan pada suatu struktur  atau kerangka teori dan kemudian menguji hipotesis-hipotesis tersebut secara empiris. Penelitian dilakukan pada bank Islam  Indonesia dan Malaysia periode waktu 2011 sampai 2016. Metode pengambilan sampel secara purposive sampling. Data penelitian merupakan data sekunder berupa  annual report dan laporan keuangan yang berasal dari Directory Perbankan Indonesia, Bursa Efek Indonesia  dan Bursa Efek Malaysia.  Teknik analisis untuk menguji perbedaan CG dan manajemen laba riil adalah uji beda Man Whitney, sedangkan untuk menguji pengaruh CG terhadap REM Bank Islam  Indonesia dan Malaysia menggunakan analisis regresi berganda ordinary least square.            Hasil menunjukkan bahwa praktik corporate governance Negara Indonesia dan Malaysia, masing masing memiliki kelebihan dan kelemahan. Mekanisme CG ada yang lebih rendah, maupun lebih tinggi antara Negara Indonesia dengan Malaysia. REM Malaysia lebih rendah signifikan dari pada Indonesia, baik melalui arus kas operasi, bagi hasil investasi, maupun biaya diskresioner. Hasil uji menunjukkan bahwa pada umumnya mekanisme CG tidak berpengaruh terhadap manajemen laba riil. Hanya Independensi komite audit yang mampu menekan manajemen laba riil melalui arus kas operasi.Keywords:Corporate governance, real earnings management, Islamic banking.

scholarly journals Pengaruh Strategi Bisnis, Financial Leverage Terhadap Manajemen Laba Dengan Corporate Governance Sebagai Variabel Moderasi

2021 ◽  
Vol 3 (1) ◽  
pp. 203-217
Author(s):  
Husnaini Dwi Wanri ◽  
Erinos NR
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Business Strategy ◽  
Stock Exchange ◽  
Secondary Data ◽  
Sampling Technique ◽  
Real Earnings Management ◽  
Manufacturing Companies ◽  
Financial Leverage ◽  
Strategy Variables

This study aims to examine the effect of business strategy and financial leverage as moderated by corporate governance in predicting real earnings management. This type of research is a causal association with a quantitative approach. The population used in this study are all manufacturing companies listed in Bursa Efek Indonesia 2016-2019. The sampling technique in this study using the purposive sampling technique, there are 80 manufacturing companies used as research samples. The business strategy variables are measured by the cost leadership strategy model for the current year. Earnings management variables are calculated by aggregating the triggering factors for earnings management, namely sales manipulation, overproduction, and discretionary spending. The leverage variable is calculated by the ratio of debt to assets and the moderating variable is measured by the proportion of share ownership by the managerial party. The data used in this study is secondary data obtained from the company's financial statements obtained from the official website of the Indonesia Stock Exchange and the official website of each company. The analytical method used is the multiple regression method which is processed using the SPSS 16 application. The results show that business strategy, financial leverage has a significant positive effect on real earnings management, CG can increase or weaken the relationship between business strategy, leverage on real earnings management but not significantly

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