The Effect of Earnings Management and Signaling on Loss Loan Provision: The Role of Bank Capitalization

2021 ◽  
Vol 6 (1) ◽  
pp. 43-50
Author(s):  
Jasman Jasman ◽  
Etty Murwaningsari ◽  
Sekar Mayangsari ◽  
Susi Dwi Mulyani
Keyword(s):  
Earnings Management ◽  
Panel Data Analysis ◽  
Capital Requirements ◽  
Jel Classification ◽  
Loan Loss ◽  
Loan Loss Provision ◽  
The Difference ◽  
Conventional Banks ◽  
The Relationship

Objective - Loan loss provision is an accrual for the banking industry, and therefore has a significant effect on bank accounting earnings and capital requirements. Previous studies showed inconsistent results for the relationship between earnings management, signaling, and loan loss provision. The difference in the results is thought to be caused by bank capitalization. Therefore, this study aims to investigate the role of bank capitalization on the effect of earnings management and signaling on loan loss provision. Methodology – The sample consists of 86 conventional banks in Indonesia for the period of 2015-2019. Furthermore, this study used panel data analysis of multiple regression. Findings – The results showed earnings management has no effect on loan loss provision. In contrast, signaling has a positive and significant effect. Although bank capitalization is not proven to weaken the effect of earnings management on loan loss provision, it strengthens the positive effect of signaling on loan loss provision. Novelty – This study proves that bank capitalization has an important role in moderating signaling impact on loan loss provision but not for the effect of earnings management. This is due to the potential for earnings management in banks is relatively low because banks are highly regulated entities and with regulated governance mechanisms limit the managers' discretionary accounting decisions. Type of Paper - Empirical Keywords: Bank Capitalization, Earnings Management, Signaling JEL Classification: G23, G32. URI: http://gatrenterprise.com/GATRJournals/JFBR/vol6.1_1.html DOI: https://doi.org/10.35609/jfbr.2021.6.1(1) Pages 43 – 50

scholarly journals Characteristics of banks as determinants of profit management for Islamic and conventional banks in ASEAN

Accounting ◽  
2021 ◽  
pp. 1179-1188 ◽  
Author(s):  
Suripto Suripto ◽  
Supriyanto Supriyanto
Keyword(s):  
Discriminant Analysis ◽  
Earnings Management ◽  
Capital Adequacy ◽  
Multiple Discriminant Analysis ◽  
Loan Loss ◽  
Loan Loss Provision ◽  
Brunei Darussalam ◽  
Capital Adequacy Ratio ◽  
Asean Countries ◽  
Conventional Banks

This study aims to analyze company characteristics as a determinant of conventional and Islamic bank earnings management in several ASEAN countries (Association of South East Asian Nations). The Multiple Discriminant Analysis was applied to determine the differences between Islamic and Conventional Banks. This test was conducted based on Capital Adequacy Ratio, Income Before Tax and Interest, Non-Performing and Changing Loans, and Company's Size in the banks of Indonesia, Malaysia, and Brunei Darussalam from 2014 to 2018. The data obtained from 200 banking entities were analyzed discriminatively. The results showed that there were simultaneous differences between Capital Adequacy Ratio, Earnings Before Tax, Loan Loss Provision, Non-Performing and Changing Loans, and Company's Size as determinants of earnings management between Islamic and conventional banks. Also, it was found that Company's Size was the dominant variable determining the management differences. Based on Discriminant Analysis, there were significant differences in the determinants of conventional and Islamic earnings management. The Changing Loan variable showed the highest contribution in determining earnings management in Islamic banks. Overall, this study found that conventional banks dominated Islamic system in practicing earnings management.

scholarly journals Bank efficiency and practice of earnings management: a study on listed commercial banks of Bangladesh

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Naznin Sultana Chaity ◽  
K.M. Zahidul Islam
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Commercial Banks ◽  
Islamic Banks ◽  
Loan Loss ◽  
Bank Efficiency ◽  
Content Type ◽  
Empirical Results ◽  
Conventional Banks ◽  
The Relationship

PurposeThe purpose of the study is to determine the relationship between bank efficiency in terms of corporate governance guidelines and the extent of practice of earnings management (EM).Design/methodology/approachArchival data of listed private commercial banks of Dhaka Stock Exchange over the period of 2007–2016 relating to corporate governance and earnings management are collected and analyzed using parametric and non-parametric methods (efficiency analysis) and applying panel regression analysis.FindingsThe same distribution pattern and have low degree of the correlation (0.248) among them. It is found that private commercial banks of Bangladesh, on average, display efficiency level of 80.84%. The average value of discretionary loan loss provision (i.e. measure of earnings management) is 0.4249 and this indicates the presence of earnings management. The relation between earnings management and efficiency score in both cases of two-step system generalized methods of moments (GMMs) and difference GMM are found to be negative. The negative coefficients (−0.7969 and −0.57) indicate that as the efficiency increases, the practice of earnings management by the private commercial bank reduces. By estimating efficiency based on corporate governance guidelines and detecting the existence of EM, the major contribution of the study is establishing the relationship between bank efficiency based on compliance with corporate governance guidelines and managerial practice of earnings management in Bangladesh. Empirical results of the study have also established the fact that the more efficient the management of the banks are, the less likely it will practice earnings management under the compliance of corporate governance guidelines in Bangladesh.Research limitations/implicationsThis research study has some limitations. Only conventional banks are considered for the study, with the exception of Islamic banks. Comparison between conventional banks and Islamic banks could have been done.Practical implicationsBased on the literature study, the effectiveness of corporate governance aligns with decreasing agency conflict, protection of shareholders' interests and restrain management from self-serving activities (i.e. practice of earnings management). The empirical results of the study established these facts. Regulators should give more emphasis on effective implementation of good governance.Originality/valueTo the best of the authors' knowledge, this may be the first to empirically determine the relationship between efficiency estimation based on corporate governance and earnings management in case of listed commercial banks of Bangladesh.

scholarly journals Analisis Pengaruh Islamic Corporate Governance terhadap Manajemen Laba pada Bank Umum Syariah di Indonesia dan Malaysia

2020 ◽  
Vol 12 (2) ◽  
pp. 183-195
Author(s):  
Amirul Arif ◽  
Agus Purwanto
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Audit Committee ◽  
Fixed Effect Model ◽  
Islamic Banks ◽  
Loan Loss ◽  
Loan Loss Provision ◽  
Financing Risk ◽  
Conventional Banks ◽  
East Asia Region

The objective of the research is to analyze the effect of Islamic Corporate Governance toward the earnings management of Islamic banks in Indonesia and Malaysia. In South East Asia region, Malaysia and Indonesia are two countries with significant development in Islamic banking and finance. Islamic Banks have different characteristics from conventional banks, however they still deal with the financing risk that could not be claimed, so it is necessary for them to have loan loss provision that lead to the existence of earnings management. The populations of the research are some Islamic Banks located in Indonesia and Malaysia during the period of time 2012 until 2017. The total amount of samples in the research is 108. After conducting the tabulation of data stage, there is no outlier data, so that the amount of final samples remains 108. This research used data panel regression, Fixed Effect model. The result of the research showed that the meeting of Islamic supervisory council, audit committee's independence and the meeting of audit committee have significant effect toward the earnings management, meanwhile the number of Islamic supervisory council and audit committee do not have significant effect on the earnings management.

Investigating the Personality Variable (LOC) & Impression Management Relationship: Exploring the Role of Demographic Variables & Sectoral Difference of Managers

2016 ◽  
Vol 7 (1) ◽  
Author(s):  
Poornima Madan ◽  
Shalini Srivastava
Keyword(s):  
Locus Of Control ◽  
Impression Management ◽  
Demographic Variables ◽  
Personality Variable ◽  
Public Sector Organizations ◽  
Private And Public ◽  
The Difference ◽  
The Relationship ◽  
Test Correlation

The purpose of the study is to investigate the relationship between locus of control and impression management. The study also examines the variation in locus of control dimensions namely, internality, externality (others) and externality (chance). It further investigates the difference on perception of demographic variables (gender and marital status) and sectoral difference on impression management. The study was administered on 125 Managers who were representatives of different private and public sector organizations in Delhi/NCR. Variables in the study were assessed using validated instruments. Descriptive Statistics, t-test, Correlation and Regression were used for data analysis. Organizations will be better prepared to dig into the arena of one of the personality variable, i.e. locus of control and its relationship with impression management. The current research is imperative in providing insights into role of personality variable (locus of control) and impression management, which will be one of the pioneer researches available till date. Moreover, the research will highlight the significance of locus of control dimensions and impression management.

scholarly journals What Difference Does Posthumanism Make?

2021 ◽  
pp. 1-7
Author(s):  
Rachel J. Crellin ◽  
Oliver J.T. Harris
Keyword(s):  
Productive Force ◽  
The World ◽  
The Status ◽  
The Difference ◽  
The Relationship

In this paper we argue that to understand the difference Posthumanism makes to the relationship between archaeology, agency and ontology, several misconceptions need to be corrected. First, we emphasize that Posthumanism is multiple, with different elements, meaning any critique needs to be carefully targeted. The approach we advocate is a specifically Deleuzian and explicitly feminist approach to Posthumanism. Second, we examine the status of agency within Posthumanism and suggest that we may be better off thinking about affect. Third, we explore how the approach we advocate treats difference in new ways, not as a question of lack, or as difference ‘from’, but rather as a productive force in the world. Finally, we explore how Posthumanism allows us to re-position the role of the human in archaeology,

scholarly journals The role of L/W in the solar radiation for Saharian cities

2019 ◽  
Vol 91 ◽  
pp. 05006
Author(s):  
Rami Qaoud ◽  
Alkama Djamal
Keyword(s):  
Solar Radiation ◽  
Solar Energy ◽  
Energy Levels ◽  
Direct Solar Radiation ◽  
Test Field ◽  
Natural Lighting ◽  
The Difference ◽  
The Impact ◽  
The Relationship

The urban fabric of the desert cities is based on the principle of reducing the impact of urban canyons on direct solar radiation. Here comes this research, which is based on a comparative study of the periods of direct solarisation and values of the solar energy of urban canyons via two urban fabrics that have different building densities, where the ratio between L/W is different. In order to obtain the real values of the solar energy (thermal, lighting), the test field was examined every two hours, each three consecutive days. The measurement stations are positioned by the three types of the relationship between L/W, (L≥2w, L=w, L≤0.5w). According to the results, we noticed and recorded the difference in the periods of direct solarization between the types of urban engineering canyons, reaching 6 hours a day, the difference in thermal values of air, reaching 4 °C, and the difference in periods of direct natural lighting, reaching 6 hours. It should be noted that the role of the relationship between L/W is to protect the urban canyons by reducing the impact of direct solar radiation on urban canyons, providing longer hours of shading, and reducing solar energy levels (thermal, lighting) at the urban canyons. This research is classified under the research axis (the studies of external spaces in the urban environment according to the bioclimatic approach and geographic approach). But this research aims to focus on the tracking and studying the distribution of the solar radiation - thermal radiation and lighting radiation - in different types of street canyons by comparing the study of the direct solarization periods of each type and the quantity of solar energy collected during the solarization periods.

IFRS Adoption and Audit Delay: The Role of Shareholders in the Audit Committee

2018 ◽  
Vol 8 (1) ◽  
pp. 325
Author(s):  
Ishaq Ahmed Mohammed ◽  
Ayoib Che-Ahmad ◽  
Mazrah Malek
Keyword(s):  
Audit Committee ◽  
Unobserved Heterogeneity ◽  
Value Relevance ◽  
Stock Exchange ◽  
Delay Model ◽  
Corporate Reporting ◽  
Ifrs Adoption ◽  
The Difference ◽  
The Relationship

This study examined the relationship between audit delay after IFRS adoption and the role of shareholders in the audit committee as well as testing the difference of pre-and post IFRS adoption periods. A sample of 101 firms with 505 firm-year observations over five year period for firms listed on the Nigeria Stock Exchange was employed for the study, utilizing data from the annual report and accounts of the sample firms. Generalized Methods of Moment (GMM) estimation was used to check the effects of unobserved heterogeneity in audit delay model, while the test of difference in R2 value for pre-and post-adoption periods was determined using Cramer’s Z-statistics. Findings indicate that audit report lag is faster with shareholders in the audit committee. The study proved that brand named auditors such as Big4 can significantly perform faster audit task than non-Big4 firms in IFRS regime. The importance of the study’s findings demonstrates statistical inference on value relevance increase based on the unique IFRS adoption in Nigeria. Thus, regulators should consider increasing the tenure of shareholders in the audit committee to enable them to become more familiar with the corporate reporting under IFRS regime.

Effects of Exposure Time and Inversion on the Confidence-Accuracy Relationship in Facial Memory: A Test of the Optimality Hypothesis

1990 ◽  
Vol 71 (1) ◽  
pp. 32-34 ◽  
Author(s):  
Stuart J. McKelvie
Keyword(s):  
Exposure Time ◽  
Moderator Variables ◽  
Facial Memory ◽  
The Difference ◽  
And Inversion ◽  
The Relationship ◽  
Accuracy Relationship

A total of 99 subjects served in two facial memory experiments designed to investigate the role of two moderator variables (exposure time and inversion) on the relationship between confidence and accuracy. Consistent with the optimality hypothesis, the difference in confidence when correct and incorrect was higher for a 5-sec. than a 1-sec. exposure and for upright than for inverted faces.

scholarly journals Examining the Mediation of Job Satisfaction in the Relationship between Work Stress and Turnover Intention in Textile Company

2020 ◽  
Vol 5 (2) ◽  
pp. 113-121
Author(s):  
Romat Saragih ◽  
Arif Partono Prasetio ◽  
Bachruddin Saleh Luturlean
Keyword(s):  
Job Satisfaction ◽  
Work Stress ◽  
Turnover Intention ◽  
Sampling Method ◽  
Sampling Technique ◽  
Jel Classification ◽  
Positive Direction ◽  
Negative Effect ◽  
The Relationship

Objective – This study investigates the mediation role of job satisfaction in the relationship between work stress and turnover intention. A study about turnover intention in the textile company is still rarely done in Indonesia. This study can fill the gap regarding the topic. Methodology/Technique – A nonprobability sampling method with an accidental sampling technique was used, and we get 110 usable responses from a textile company in West Java, Indonesia. Macro Process with SPSS was used to measure the regression and the mediation. Findings – The study found that work stress has a negative effect on job satisfaction. Work stress significantly related to turnover intention in a positive direction. Job satisfaction did not have a significant relation with turnover intention. Thus, in this study, we found no mediation role in job satisfaction. Novelty – Evidently, work stress solely took part in shaping the turnover intention. Type of Paper: Empirical. Keywords: Work stress, Job satisfaction, Turnover intention, Textile Company, Mediation Reference to this paper should be made as follows: Saragih, R; Prasetio, A.P; Luturlean, B.S. 2020. Examining the Mediation of Job Satisfaction in the Relationship between Work Stress and Turnover Intention in Textile Company, J. Mgt. Mkt. Review 5(2) 113 – 121. https://doi.org/10.35609/jmmr.2020.5.2(4) JEL Classification: J28, J29, M19.

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