scholarly journals The impact of ownership structure, financial distress on earnings management: The case of Vietnam

2020 ◽  
Author(s):  
Hung Dang Ngoc ◽  
Dung Tran Manh
Keyword(s):  
Earnings Management ◽  
Ownership Structure ◽  
Financial Distress ◽  
Audit Quality ◽  
Foreign Ownership ◽  
State Ownership ◽  
Ownership Concentration ◽  
Regression Methods ◽  
Study Results ◽  
The Impact

The paper examines the effect of ownership structure on profit management in Vietnam. In this study, we explore how three components of ownership structure - the degree of ownership concentration of managers, foreign ownership ratio and state ownership ratio - affect earnings management. In addition, we also consider whether ownership structure affects profit management during financial constraints.<b> </b>We used REM, FEM, GLS, and GMM regression methods. The study results have shown that ownership structure with foreign ownership has a positive effect on earnings management, whereas one with a proportion of state ownership has a contradicting effect. While the degree of ownership concentration does not affect the profit management, in the context of financial restrictions, the ownership ratio has an impact on the management of earnings. Controllable variables in the model, such as firm size, financial leverage, growth rate, profitability and audit quality, all have an impact on earnings management. The results could, potentially, be the basis to help businesses in restricting earnings management behaviour.

scholarly journals The impact of ownership structure, financial distress on earnings management: The case of Vietnam

2020 ◽  
Author(s):  
Hung Dang Ngoc ◽  
Dung Tran Manh
Keyword(s):  
Earnings Management ◽  
Ownership Structure ◽  
Financial Distress ◽  
Audit Quality ◽  
Foreign Ownership ◽  
State Ownership ◽  
Ownership Concentration ◽  
Regression Methods ◽  
Study Results ◽  
The Impact

The paper examines the effect of ownership structure on profit management in Vietnam. In this study, we explore how three components of ownership structure - the degree of ownership concentration of managers, foreign ownership ratio and state ownership ratio - affect earnings management. In addition, we also consider whether ownership structure affects profit management during financial constraints.<b> </b>We used REM, FEM, GLS, and GMM regression methods. The study results have shown that ownership structure with foreign ownership has a positive effect on earnings management, whereas one with a proportion of state ownership has a contradicting effect. While the degree of ownership concentration does not affect the profit management, in the context of financial restrictions, the ownership ratio has an impact on the management of earnings. Controllable variables in the model, such as firm size, financial leverage, growth rate, profitability and audit quality, all have an impact on earnings management. The results could, potentially, be the basis to help businesses in restricting earnings management behaviour.

scholarly journals The Impact of Ownership Structure on Earnings Management: The Case of Vietnam

SAGE Open ◽  
2021 ◽  
Vol 11 (3) ◽  
pp. 215824402110472
Author(s):  
Manh Dung Tran ◽  
Ngoc Hung Dang
Keyword(s):  
Earnings Management ◽  
Ownership Structure ◽  
Audit Quality ◽  
Foreign Ownership ◽  
State Ownership ◽  
Ownership Concentration ◽  
Regression Methods ◽  
The Impact ◽  
Positive Effect

This study is conducted to investigate the impact of ownership structure on earnings management in emerging countries and Vietnam as the case study. In this research, we explore how three components of ownership structure, including ownership concentration of managers, foreign ownership ratio, and state ownership ratio, influence earnings management. In addition, we also consider whether ownership structure influences profit management during financial constraints. REM, FEM, GLS, and GMM regression methods are employed for processing data. The results show that ownership structure with foreign ownership has a positive effect on earnings management, whereas one with a proportion of state ownership has a contradicting effect. While the degree of ownership concentration does not affect the profit management, in the context of financial restrictions, the ownership ratio has an impact on the management of earnings. Control variables in the model such as firm size, financial leverage, growth rate, profitability, and audit quality, all have an impact on earnings management. The results could, potentially, be the basis to help firms in restricting earnings management behavior.

Earnings management and audit quality at Damascus securities exchange: Does managerial ownership matter?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Zukaa Mardnly ◽  
Zinab Badran ◽  
Sulaiman Mouselli
Keyword(s):  
Earnings Management ◽  
Ownership Structure ◽  
Management Practices ◽  
Audit Quality ◽  
Emerging Market ◽  
Ordinary Least Squares ◽  
Managerial Ownership ◽  
External Audit ◽  
Content Type ◽  
The Impact

Purpose The purpose of this study is to examine the individual and combined effect of managerial ownership and external audit quality, as two control mechanisms, on earnings management. Design/methodology/approach This study applies ordinary least squares estimates on fixed-time effects panel regression model to test the impact of the investigated variables on earnings management for the whole population of banks and insurance companies listed at Damascus Securities Exchange (DSE) during the period from 2011 to 2018. Findings The empirical evidence suggests a negative non-linear relationship between managerial ownership (as proxied by board of directors’ ownership) on earnings management. However, neither audit quality nor the simultaneous effect of the managerial ownership and audit quality (Big 4) affects earnings management. Research limitations/implications DSE is dominated by the financial sector and the number of observations is constrained by the recent establishment of DSE and the small number of firms listed at DSE. In addition, the non-availability of data on executive directors’ and foreign ownerships restrict our ability to uncover the impact of different dimensions of ownership structure on earnings management. Practical implications First, it stimulates investors to purchase stocks in financial firms that enjoy both high managerial ownership, as they seem enjoying higher earnings quality. Second, the findings encourage external auditors to consider the ownership structure when choosing their clients as the financial statements’ quality is affected by this structure. Third, researchers may need to consider the role of managerial ownership when analyzing the determinants of earnings management. Originality/value It fills the gap in the literature, as it investigates the impact of both managerial ownership and audit quality on earnings management in a special conflict context and in an unexplored emerging market of DSE. It suggests that managerial ownership exerts a significant role in controlling earnings management practices when loose regulatory environment combines conflict conditions. However, external audit quality fails to counter earnings management practices when conditions are fierce.

scholarly journals The impact of ownership structure on financial reporting quality in the east

2017 ◽  
Vol 25 (2) ◽  
pp. 178-197 ◽  
Author(s):  
Qaiser Rafique Yasser ◽  
Abdullah Al Mamun ◽  
Margurite Hook
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Ownership Structure ◽  
Developing Economies ◽  
Reporting Quality ◽  
State Ownership ◽  
Financial Reporting Quality ◽  
Content Type ◽  
Negatively Associated ◽  
The Impact

Purpose This paper aims to focus mainly on the relationship between ownership structure and earnings management of a developed and two developing economies, and is distinct from prior research. Design/methodology/approach Using a sample of firms from three countries (Australia, Malaysia and Pakistan), the detailed ownership evolutions for the period 2011-2013 were observed. Findings Overall, the authors find that in the East, ownership concentration is negatively associated with financial reporting quality. Individual ownership and group ownership were negatively associated with earnings management in Pakistan, however, not in Malaysia where the same were positively associated. Further, the result of this study indicated that state ownership is negatively associated with firm performance. Among the control variables, it was found that larger firms were negatively correlated with financial reporting, while firms with a larger board size and mature in the maneuver were coupled positively with earnings management. Originality/value The results highlight the highly individualized effects of blockholders and the need for research to further understand the mechanisms through which shareholders impact financial reporting quality.

scholarly journals Ownership structure and corporate diversification decision: a study of Vietnamese listed firms

2016 ◽  
Vol 13 (3) ◽  
pp. 226-233 ◽  
Author(s):  
Duc Nam Phung ◽  
Thi Bich Nguyet Phan ◽  
Thi Lien Hoa Nguyen ◽  
Thi Phuong Vy Le
Keyword(s):  
Ownership Structure ◽  
Negative Impact ◽  
Positive Impact ◽  
Emerging Market ◽  
Foreign Ownership ◽  
State Ownership ◽  
Corporate Diversification ◽  
Diversification Strategy ◽  
Listed Firms ◽  
The Impact

This research examines the impact of the ownership structure on corporate diversification decision of listed firms in Vietnam over the period of 2007 and 2012. The empirical results from logit model show that while state ownership has positive impact on corporate diversification decisions of the firms, foreign ownership has negative impact on corporate diversification decision of the firms. This implies that government ownership tends to encourage corporate diversification strategy, while foreign ownership may plays monitoring role and discourage corporate diversification strategy in emerging market context.

scholarly journals PENGARUH STRUKTUR KEPEMILIKAN ASING DAN KUALITAS AUDIT TERHADAP NILAI PERUSAHAAN DENGAN MANAJEMEN LABA SEBAGAI MEDIASI

2021 ◽  
Vol 20 (1) ◽  
pp. 46-70
Author(s):  
Sri Hardyanti Budiman ◽  
Fransiskus Randa ◽  
Bernadeth Tongli
Keyword(s):  
Earnings Management ◽  
Ownership Structure ◽  
Indirect Effect ◽  
Firm Value ◽  
Audit Quality ◽  
Stock Exchange ◽  
Secondary Data ◽  
Foreign Ownership ◽  
Annual Reports ◽  
Insignificant Effect

This study aims to examine the effect of foreign ownership structure and audit quality on firm value with earnings management as mediation. The population used in this study are all companies listed on the Indonesia Stock Exchange (IDX) with the research period of 2013-2018. The method of determining the sample using non-random sampling i.e purposive sampling and uses secondary data in the form of annual reports and financial statements of the company. The analytical methods used are path analysis and simultaneous test (F test). The results showed that the foreign ownership structure has a negative and significant effect on earnings management, audit quality has a negative and insignificant effect on earnings management, foreign ownership structure has a positive and insignificant effect on firm value, audit quality has a positive and significant impact on earnings management. firm value, and earnings management have a positive and significant effect on firm value. This study also found that foreign ownership structure  has an indirect effect on firm value through earnings management and audit quality has an indirect effect on firm value through earnings management.

scholarly journals PENGARUH EARNINGS MANAGEMENT TERHADAP FUTURE PROFITABILITY TERKAIT DENGAN OWNERSHIP STRUCTURE, FIRM SIZE DAN CORPORATE GOVERNANCE PRACTICES

Media Ekonomi ◽  
2017 ◽  
Vol 20 (2) ◽  
pp. 55
Author(s):  
Ikhsan Yudha Asmara ◽  
Felizia Arni Rudiawarni
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Ownership Structure ◽  
Audit Committee ◽  
Audit Quality ◽  
Stock Exchange ◽  
Manufacturing Sector ◽  
The Future ◽  
Governance Practices ◽  
The Impact

This study aims to determine how the effect of earnings management on future profitability business entity engaged in the manufacturing sector listed on the Indonesia Stock Exchange, and how the effects of the ownership structure, company size, and the practice of corporate governance (proxied by the audit quality, independent board member and audit committee) regarding the impact of earnings management on the future profitability of manufacturing sector enterprises listed on the Stock Exchange. This study used a sample of manufacturing sector companies listed on the Indonesia Stock Exchange in the period 2008-2010. The samples used in this study were 262 observations. The sampling method used was probability sampling - judgment / purposive sampling. Independent variables used in this study are earnings management (proxied by the CFO, NDAC, and DAC), ownership structure (proxied by DFAM and INST), firmsize, and corporate governance practices (proxied by the AUDIT, BOD, and AUDCOM). The dependent variable in this study is the future profitability proxied by the variable "and CFOT earnt + 1 + 1. The results of this study were (1) earnings management proved to have a significant impact on the future profitability of manufacturing sector enterprises. The influence that appears different depending on the proxy used; (2) The ownership structure did not have an influence on the behavior of earnings management related to future profitability of manufacturing sector enterprises; (3) firmsize not affect earnings management behaviors related to future profitability of manufacturing sector enterprises; overall corporate governance practices are not effective in influencing the behavior of earnings management related to the future profitability of manufacturing sector enterprises. Keywords  :   future profitability, earnings management, ownership structure, corporate governance practice

scholarly journals The Effects of Corporate Governance Practices on the Choice between Efficient and Opportunistic Earnings Management

2016 ◽  
Vol 11 (9) ◽  
pp. 1
Author(s):  
Tim Vervaat ◽  
Georgios Georgakopoulos ◽  
Konstantinos Z. Vasileiou ◽  
Ioannis Sotiropoulos
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Audit Committee ◽  
Audit Quality ◽  
Audit Fees ◽  
Audit Committees ◽  
Outside Directors ◽  
Study Results ◽  
Governance Practices ◽  
The Impact

This study aims to explore the preferences of the publicly listed companies on the S&amp;P 500 index regarding their earnings management (efficient or opportunistic) as well as the impact of the corporate governance practices (audit committee, board independence and audit quality) on their decision. Using two separate regression models, it was found that American firms listed on the S&amp;P 500 index tend to conduct efficient earnings management, which is in line with the findings of prior research. Moreover, it emerged that the earnings management selection does not depend on the amount (high vs small) of audit fees paid by the companies. Additionally, the governance practice of employing more outside directors in the audit committees leads to more efficient earnings management. Finally, according to the study results, the impact of discretionary accruals on future profitability is not significantly related to the proportion of independent members on the board of directors.

scholarly journals Analisis Pengaruh Struktur Kepemilikan, Ukuran dan Pertumbuhan Perusahaan terhadap Manajemen Laba pada Perusahaan BEI Tahun 2014-2018

2020 ◽  
Vol 5 (2) ◽  
pp. 222-232
Author(s):  
Mardianto Mardianto
Keyword(s):  
Earnings Management ◽  
Ownership Structure ◽  
Institutional Ownership ◽  
State Ownership ◽  
Ownership Concentration ◽  
Annual Reports ◽  
Family Ownership ◽  
Company Size ◽  
Independent Variables ◽  
Company Growth

The study was conducted with the aim of analyzing the effect of ownership structure, company size and company growth as an independent variables on earnings management as the dependent variable. Ownership structure is represented by proxies of ownership concentration, institutional ownership, family ownership, and state ownership. This study collected data with a purposive sampling method. The object of collecting data samples is in the form of data from financial reports and annual reports of companies listed on the Indonesia Stock Exchange (IDX) from 2014 to 2018. This study uses multiple regression analysis methods to examine the effect of independent variables on the dependent variable. Research data were tested using Statistical Product and Service Solutions (SPSS). The results showed that family ownership, institutional ownership and state ownership had a significant positive effect on earnings management. Ownership concentration has a significant negative effect on earnings management. Meanwhile, company size and company growth do not have a significant relationship with earnings management.

scholarly journals Ownership Structure and Earnings Management: Empirical Evidence from Vietnam Real Estate Sector

2020 ◽  
Vol 28 (2) ◽  
pp. 37-51
Author(s):  
Anh Huu Nguyen ◽  
Linh Ha Nguyen ◽  
Duong Thuy Doan
Keyword(s):  
Real Estate ◽  
Stock Market ◽  
Earnings Management ◽  
Ownership Structure ◽  
Information Quality ◽  
Positive Influence ◽  
Real Estate Market ◽  
State Ownership ◽  
Real Estate Sector ◽  
The Impact

AbstractThe young real estate market in Vietnam, an emerging country in Asia, has been growing remarkably. This is an attractive channel for investors, but it seems to be an unstable market and have high potential source of earnings management while investing in real estate companies listed in Vietnamese stock market. The research has been conducted to investigate the impact of the ownership structure on the earnings management of Vietnamese listed real estate companies. The research methodology includes four statistical approaches OLS, FEM, REM and REM (robust) that are employed to address econometric issues and to improve the accuracy of the regression coefficients. The research sample consists of 180 firm-year observations for 36 real estate companies listed on Vietnamese stock market over a period of five years, i.e. from 2014 to 2018. The results show that, while state ownership showed a positive influence, managerial ownership played negative significant roles in relation to earnings management. This research has implications for designing a better ownership structure in the Vietnamese real estate sector and enhancing information quality to protect investors.

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