Effect of Ind AS on Earnings Management in Selected FMCG Companies in India

The Corporate frauds have increased drastically which is witnessed in the last decade in India and around the world. Managers use their judgement in analysing the financials and modification of statements which is the origination for earnings management. This paper discusses about earnings management evaluation after adoption of Ind AS for the first time by leading fast moving consumer goods companies in India. Random sampling is used to select three companies and analyse for a period of 6 years (2014-2020) The Jones Model (1991) is used for evaluation of earnings management and tested using the regression model to arrive at the findings. The Jones model of non-discretionary accruals is used for the purpose of evaluation of accounting manipulation. The Jones model has non-discretionary and discretionary accruals estimated in the model. The R square is 14.3% and F-test significance value is greater than 0.05 therefore null hypothesis is accepted concluding there is no change in earnings management after the new standards.

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Earnings management and income tax evidence from Greece

Corporate Ownership and Control ◽

10.22495/cocv12i2c5p1 ◽

2015 ◽

Vol 12 (2) ◽

pp. 511-529 ◽

Cited By ~ 1

Author(s):

Eftychia Kapoutsou ◽

Christos Tzovas ◽

Constantinos Chalevas

Keyword(s):

Earnings Management ◽

Significant Relationship ◽

Income Tax ◽

Management Practices ◽

Management Accounting ◽

Discretionary Accruals ◽

Earning Management ◽

Total Current ◽

Jones Model ◽

Deferred Tax

The aim of this study is to examine the question of earnings management and, specifically, how this relates to taxation. In order to determine whether there is a correlation between earnings management and taxation, we investigate the discretionary accruals aspect of total accruals, i.e. the portion of profits which can be affected by management accounting choices, as calculated by the Jones (1991) model and the modified Jones model (Dechow et. al, 1995). Furthermore, we examine to what degree a correlation may exist between discretionary accruals and tax income (consisting of current and deferred tax). Our empirical findings demonstrate a statistically significant relationship between the levels of discretionary accruals and of total, current and deferred tax. This suggests that tax in general may be employed as a means to facilitate earnings management. The findings of this study suggest that IFRS provisions regarding taxation provide firms with a scope to get involved in earning management practices

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Determination of earnings management: An application in BISTKazanç yönetiminin tespiti: BIST’de bir uygulama

Journal of Human Sciences ◽

10.14687/jhs.v13i3.4367 ◽

2016 ◽

Vol 13 (3) ◽

pp. 6080

Author(s):

Meral Gündüz

Keyword(s):

Earnings Management ◽

Financial Reporting ◽

Manufacturing Industry ◽

Discretionary Accruals ◽

Financial Information ◽

Accounting System ◽

Reporting Process ◽

Management Application ◽

Jones Model

Companies, by use of the flexibility of alternative applications in accounting system, apply profit management by organizing the financial tables unequal to the real situations. Profit management is to interfere external financial reporting process in order to gain special profits. With profit management, the main aim is to affect decisions and plans of the investors and the other financial information usersEarnings management is a kind of management which uses accounting techniques to meet the executives needs for earnings; it is a widely debated topic, hence it is worth looking at. Experts and professionals in this area found many approaches to detect the earnings management; within these approaches are the accrual-based models which include the modified Jones model, which currently is a favourite model to many researchers. In the study is aim to determine the earnings management application the data of 81 companies which were in business in Istanbul stock market (BIST-100) manufacturing industry between the years 2013-2015 is used. In this study regression analysis was made by using Modified Jones model and investigated whether their earnings management application or not , has also targeted to determine the companies applying for earnings management.The distribution of the average of discretionary accruals calculated for years as each company is analyzed; average of discretionary accruals shows a normal distribution, in this situation, It was concluded that there was no impact on the economic development of total accruals, depending on the establisded regression model. It can be expressed that the companies were in tendency to increase revenues for 2014 year and to decrease in revenue for 2013 and 2015 years. In addition, companies which tend to manipulation in this study were identified. Özetİşletmeler, muhasebe sistemindeki alternatif uygulamaların sağladığı esneklikten yararlanarak, finansal tabloları gerçekte olduğundan farklı gösterecek şekilde düzenlemek suretiyle kazanç yönetimi uygularlar. Kazanç yönetimi, özel kazançlar elde etmeye yönelik dışsal finansal raporlama sürecine bu amaçlara uygun olarak müdahale etmektir. Kazanç yönetimi ile yatırımcıların ve diğer finansal bilgi kullanıcılarının karar ve düşüncelerini etkilemek amaçlanmaktadır.Kazanç yönetimi, yöneticilerin kazanç ihtiyaçlarını karşılamak amacıyla kullandıkları çok tartışılan bu yüzden araştırılmaya değer bir yöntemdir. Bu alanda uzman ve profesyoneller kazanç yönetimini tespit etmek için birçok yaklaşımı bulmuşlardır ki bu yaklaşımlar arasında birçok araştırmacı tarafından favori model kabul edilen tahakkuk esaslı Düzeltilmiş Jones Modelidir.Kazanç yönetimi uygulamalarının belirlenmesini amaçlayan bu çalışmada, BİST 100 endeksindeki 81 şirketin 2013-2015 yılları arasındaki verilerinden faydalanılmıştır. Araştırmada literatürde yer alan Düzeltilmiş Jones Modeli kullanılarak regresyon analizi yapılmış ve bu yöntemle şirketlerin kazanç yönetimi uygulaması yapıp yapmadığı araştırılmış, ayrıca kazanç yönetimi uygulayan şirketlerin belirlenmesine yönelik çalışma hedeflenmiştir. Yıllar itibariyle her bir şirket için hesaplanan ihtiyari tahakkukların ortalamalarının dağılımı incelendiğinde; ihtiyari tahakkukların ortalamalarının normal dağılım gösterdiği, bu durumunda kurulan regresyon modeline bağlı olarak toplam tahakkuklar üzerinde ekonomik gelişmelerin bir etkisinin olmadığı sonucuna varılmıştır. Analiz sonucuna göre şirketlerin 2013 ve 2015 yıllarında gelir azaltıcı ve 2014 yılında gelir artırıcı bir manipülasyon eğiliminde oldukları ifade edilebilir. Ayrıca bu çalışmada kazanç yönetimi eğiliminde olan şirketler belirlenmiştir.

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Earnings Management And Privatisations: Evidence From Pakistan Evidence From Pakistan

The Pakistan Development Review ◽

10.30541/v54i2pp.79-96 ◽

2015 ◽

Vol 54 (2) ◽

pp. 79-96 ◽

Cited By ~ 1

Author(s):

Abdullah Muhammad Iqbal ◽

Iram Khan ◽

Zeeshan Ahmed

Keyword(s):

Earnings Management ◽

Discretionary Accruals ◽

Cash Flows ◽

Jel Classification ◽

Short Term ◽

Jones Model ◽

Reported Earnings

This study examines the incidence of earnings management around the time of the privatisation of State Owned Enterprises in Pakistan during 1991-2005. Using the modified Jones model and a sample of large privatisations (minimum US$1 million), it shows that the sampled firms experienced increase in earnings, decrease in cash flows, and increase in current discretionary accruals in the year prior to and/or in the year of privatisation. The SOEs used both short term and long term accruals to inflate reported earnings. These accruals were reversed in the post-privatisation period. These findings suggest that managers of the firms slated for privatisation were engaged in earnings management to inflate their firms‘ financial worth to maximise the privatisation proceeds. Hence, we cannot reject the incidence of earnings management during privatisations in Pakistan. The results imply that the investors should carefully evaluate the to-be-privatised firms and keep in view the possibility of earnings management by the SOEs. JEL Classification: G14, G34, G38, L33, M41 Keywords: Earnings Management, Privatisations, SOEs, Pakistan, Accruals

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The New Semantics Suggested for the Marketing Mix by Millennials

International Journal of Recent Technology and Engineering - 2 ◽

10.35940/ijrte.b1031.0982s919 ◽

2019 ◽

Vol 8 (2S9) ◽

pp. 141-144

Keyword(s):

Consumer Goods ◽

Fast Moving ◽

Random Sampling ◽

Sampling Technique ◽

Marketing Mix ◽

Marketing Strategies ◽

Capital City ◽

Model Data ◽

Fast Moving Consumer Goods ◽

The City

This is an auxiliary study dealing with the 4 Ps of the Marketing Mix Model introduced by Robert F. Lauterborn. It focused on the comparative popularity of the components of the Marketing Mix among the contemporary consumers of fast moving consumer goods (FMCGs) produced by Unilever and Proctor and Gamble in the capital city of Islamabad, Pakistan. These two companies are two of the prominent multi-national companies providing products of day-to-day use in the country. This study sought to find out the most popular vocabulary to describe the components of the Marketing Mix among the consumers of FMCGs who are marketing graduates and thereby, revise, enhance and refurbish it to make it more relevant to the millennial perspective. The perspective of the consumers is important to gauge if the Lauterborn’s Model is still applicable to the modern consumers or if the consumers have other marketing priorities, which may differ from the model. Data were collected through a survey based on the random sampling technique from millennial consumers at five local universities in the city. Analysis of the data revealed useful information regarding the validity of the semantics in the presently accepted marketing mix. Findings of this study have the potential to assist marketing strategies, especially at the advertising departments of the leading FMCG chains Unilever and Proctor and Gamble. Results of this study may also be applied to marketing campaigns of similar prominent multi-national companies producing FMCGs in Pakistan, like Nestle, Reckitt Benckiser and the Coca Cola Company

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Impact of IPO grading on earnings management

Journal of Financial Reporting and Accounting ◽

10.1108/jfra-05-2013-0036 ◽

2015 ◽

Vol 13 (2) ◽

pp. 142-158 ◽

Cited By ~ 1

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.

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COMPARISON OF EARNINGS MANAGEMENT IN EACH NON-FINANCIAL SECTOR OF BUMN LISTED ON THE IDX

JOURNAL OF ACCOUNTING, ENTREPRENEURSHIP AND FINANCIAL TECHNOLOGY (JAEF) ◽

10.37715/jaef.v2i2.1832 ◽

2021 ◽

Vol 2 (2) ◽

pp. 133-152

Author(s):

Shintya Fransiska

Keyword(s):

Earnings Management ◽

Sampling Method ◽

Management Practices ◽

Financial Sector ◽

Discretionary Accruals ◽

The Other ◽

Average Level ◽

Construction Sector ◽

Jones Model ◽

The Difference

This research was conducted to determine whether there are differences in each non-financial sector of BUMN listed on the IDX in carrying out earnings management practices. The research sample includes a saturated sampling method. The research sample consisted of 19 companies were divided into 8 sectors. The amount of data used is 225 data from 2006-2019. Earnings management will be measured using discretionary accruals with a Modified Jones model. The hypothesis was tested using the Kruskal Wallis test and followed by the Dunn test. The results show that there are differences in the level of earnings management in each non-financial sector of BUMN listed on the IDX. The difference is due to the higher level of earnings management carried out by the construction sector compare to the other sectors. Furthermore, the metal sector has the lowest average level of earnings management practices.

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Impact of Women's Portrayal in Television Commercials on Promoting Fast-Moving Consumer Goods

International Journal of Information Technology Project Management ◽

10.4018/ijitpm.2021010104 ◽

2021 ◽

Vol 12 (1) ◽

pp. 80-92

Author(s):

Sree Pavani V. ◽

Ramachandra Aryasri A. ◽

Sudhir Reddy M.

Keyword(s):

Statistical Analysis ◽

Consumer Goods ◽

Research Work ◽

Primary Role ◽

Television Commercials ◽

The World ◽

Fast Moving Consumer Goods ◽

Tv Commercials ◽

The Impact

In various fields, the role of women has been changing over the years in diverse fields around the world like academics, advertising, politics, etc. Nowadays, women portrayal plays a primary role in TV commercials for marketing the FMCG products at an extreme level. This paper intends to study the women portrayal in TV commercials for the purpose of promoting FMCG. It conducts the study in three different perceptive. The first perspective investigates the relevance between the characteristic/category of the FMCG and the impact of women portrayal. The second and third perspectives include the economy, exploitation, and the growth of the FMCG sectors. The fourth perspective understands the merits, challenges, and bottlenecks faced by the promoters or producers of the FMCG, who exploit the commercials. Accordingly, the research work prepares an extensive questionnaire under these four perspectives to carry out a valuable study. After getting various responses from 21 industries, it carries out the statistical analysis to validate the overall responses. Eventually, it reveals the impact of women portrayal on systematically promoting FMCG products.

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Marketing at Patanjali Ayurved: Creating Value in a Herbal Way

South Asian Journal of Business and Management Cases ◽

10.1177/2277977919881415 ◽

2020 ◽

Vol 9 (1) ◽

pp. 99-111 ◽

Cited By ~ 1

Author(s):

Neeraj Pandey ◽

Gaurav Paul

Keyword(s):

Growth Rate ◽

Consumer Goods ◽

Herbal Product ◽

Consumer Trust ◽

Annual Growth Rate ◽

Herbal Products ◽

Compound Annual Growth Rate ◽

Brand Building ◽

The World ◽

Fast Moving Consumer Goods

On 9 October 2018, Baba Ramdev announced that Patanjali Ayurved Limited (PAL) would become the largest Fast-moving consumer goods (FMCG) organization in the world by 2025 (ET Bureau, 2018). PAL had created high visibility and awareness about its brands among consumers using the herbal and wellness positioning. The CAGR (compound annual growth rate) of 100 per cent since the last 4 years was an indicator of preference of herbal products by the consumers (Malviya & Bhushan, 2018). However, the competitors were launching various herbal product ranges to counter PAL. Baba Ramdev knew that consumer ‘trust’ in the brand building of herbal products was crucial. He was exploring various options for keeping the present trust intact.

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IFRS and accounting quality: legal origin, regional, and disclosure impacts

International Journal of Accounting and Information Management ◽

10.1108/ijaim-11-2015-0075 ◽

2016 ◽

Vol 24 (3) ◽

pp. 296-316 ◽

Cited By ~ 24

Author(s):

Ajit Dayanandan ◽

Han Donker ◽

Mike Ivanof ◽

Gökhan Karahan

Keyword(s):

Earnings Management ◽

Financial Reporting ◽

Common Law ◽

Civil Law ◽

Discretionary Accruals ◽

Income Smoothing ◽

Content Type ◽

The World ◽

The Impact

Purpose The purpose of this study is to examine whether the quality of financial reporting has improved after the adoption of International Financial Reporting Standards (IFRS) in Europe and across the world. The study investigates the impact of IFRS on income smoothing and earnings management in different geographic regions under different legal origins and disclosure environments. Design/methodology/approach To measure income smoothing in the pre- and post-IFRS periods, the authors use the coefficient of variation and the panel unit root model proposed by Im et al. (2003) for testing whether net income is stationary throughout the sample period. The study uses a dynamic panel estimation framework, as it captures the dynamics of IFRS on discretionary accruals efficiently. Discretionary accruals are used to measure earnings management. Findings The results suggest that the adoption of high quality standards, such as IFRS, reduces income smoothing and earnings management. In addition, the study finds that earnings management has decreased in the post-IFRS period, in particular, for French and Scandinavian civil law countries, but not for German civil law countries and common law countries. The latter can be explained by the fact that common law countries have strong investor protection laws, strict law enforcement and high disclosure levels of financial information. The study also finds empirical evidence that the adoption of IFRS reduces earnings management in countries with high levels of financial disclosure. Overall, the study shows that the adoption of IFRS improved the quality of financial reporting. Originality/value This study is useful for accounting standard setters across the world, including those countries that have not yet decided to adopt IFRS. The study contributes to the literature by examining the adoption of IFRS in income smoothing and earnings management under different legal regimes and disclosure environments by using advanced empirical methodologies.

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Outside Director Equity Compensation And The Monitoring Of Management

Journal of Applied Business Research (JABR) ◽

10.19030/jabr.v28i6.7346 ◽

2012 ◽

Vol 28 (6) ◽

pp. 1315 ◽

Cited By ~ 3

Author(s):

Guy McClain

Keyword(s):

Earnings Management ◽

Discretionary Accruals ◽

Font Size ◽

Outside Directors ◽

Accounting Earnings ◽

Stock Performance ◽

Accounting Performance ◽

Equity Compensation ◽

Outside Director ◽

First Time

Using a sample of firms that are first time users of outside director equity compensation, I examine the effect of outsider director equity compensation on director monitoring by investigating firm performance and earnings management. My results, although lagged and not noticeable until year three, show that those firms that compensate outside directors with a higher percentage of equity compensation have higher stock performance, but lower accounting performance. These same firms also have lower discretionary accruals (i.e., less earnings management). These results suggest that outside directors do increase their monitoring by lowering discretionary accruals and thereby, lowering accounting earnings. In addition, this increased monitoring has a positive effect on stock performance. The results indicate that increased monitoring of accounting earnings results in lower discretionary accruals and thus lower, but more accurate earnings, and stock performance for the same period is not negatively impacted.

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