How do Family and Managerial Ownership Structure Effect Real Earnings Management?

Despite several works on corporate governance examine the ownership structure on earnings management, the empirical research on Real Earnings Management (REM) is limited. Thus, the main purpose of the research is to examine the effect of family and managerial ownership on real earnings management of selected non-financial listed companies at Colombo Stock Exchange (CSE) in Sri Lanka. The researchers use quantitative approach to address this current issue, and the data were collected using a sample of 206 firms listed at the CSE during the highest market capitalization period from 2015/2016 to 2019/2020, and eliminated the companies listed in the industry of bank, finance and insurance because the companies are governing by rules and regulation. The study found that family and managerial ownership play a prominent role and negatively related with real earning management activity. The finding of the study contributes to knowledge in earnings management of agency theory literature in developing economies, and help the investors, supplier auditors and policy makers for their decision-making activities by detecting the real earning management in different ownership structure.

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The Influence of a Company’s Ownership Structure on Upward Real Earnings Management

Sustainability ◽

10.3390/su12010152 ◽

2019 ◽

Vol 12 (1) ◽

pp. 152 ◽

Cited By ~ 4

Author(s):

Andrzej Piosik ◽

Ewa Genge

Keyword(s):

Earnings Management ◽

Ownership Structure ◽

Institutional Investors ◽

Management Practices ◽

Stock Exchange ◽

Negative Relationship ◽

Real Earnings Management ◽

Ownership Concentration ◽

Managerial Ownership ◽

Financial Transparency

Financial transparency, including transparency of transactions, is one of the pillars of sustainability. This study investigates whether a company’s ownership structure, including ownership concentration, managerial ownership, and the presence of institutional investors, affects upward real earnings management practices. The research is based on companies listed on the Warsaw Stock Exchange in Poland adapting panel data regression models. The significance and contribution to literature of the paper lies in the fact that we provide evidence that the association between the magnitude of total upward real earnings management and shareholder concentration is U-shaped, thereby indicating that there is an optimal level of ownership concentration, minimizing the magnitude of upward real earnings management and thus increasing financial transparency. Our results show the negative relationship between total upward real earnings management and managerial ownership, thereby we confirm the alignment of interest hypothesis, in terms of real earnings management. We also confirm that individual instruments of real earnings management are linked to ownership concentration and managerial ownership in specific ways. The presence of institutional investors reduces the magnitude of total upward real earnings management.

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The effect of the type of controlling shareholders and corporate governance on real and accruals earnings management

Corporate Ownership and Control ◽

10.22495/cocv13i1c8p10 ◽

2015 ◽

Vol 13 (1) ◽

pp. 917-935

Author(s):

Surifah

Keyword(s):

Corporate Governance ◽

Earnings Management ◽

Stock Exchange ◽

Banking System ◽

Real Earnings Management ◽

Earning Management ◽

Real Activity ◽

Controlling Shareholders ◽

Real Earning ◽

Negative Impacts

This research investigates the relationship between corporate governance and preference of earnings management selected by Indonesian banking controlling shareholders. This study uses all banks listed on Indonesian Stock Exchange from 2006 until 2011 as samples. The result shows higher real earning managements and lower accruals discretionary in family-controlled banks and private institution compared to government-controlled banks. Government-controlled banks prefer accrual-based earnings management and real activity-based earnings management through operating cash flow. In the other hand, family-controlled banks and private institutions prefer real earnings management through interest expense and discretionary expenses. Foreign-controlled- banks choose earnings management through discretionary expenses. The implementation of corporate governance in Indonesia banking is high and giving negative impacts both to accrual and real-based earnings management. Concentrated ownership gives positive influences toward the accrual earning management and real earning management through discretionary expenses. The bank size has a positive and significant influence on accrual earnings management, yet its effect is negative and significant on real earning management through interest expenses. The findings contribute to the development of financial accounting literatures because there are small numbers of previous research on accrual discretionary on family-owned companies. Company does not indicate the increase of earnings quality, but it is indeed indicating that controlling family pays more attention on choosing the real activity-based earnings management to cover the expropriation. Accrual discretionary-based earnings management is intra-period reversely thus it cannot cover the permanent expropriation of controlling owners. The research also contributes to the studies of real-based earnings management measurement in banking system which has not been become a concern of research on previous studies.

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THE INFLUENCE OF CORPORATE GOVERNANCE, COMPANY SIZE, AND LEVERAGE TOWARD EARNING MANAGEMENT

Jurnal Akuntansi Trisakti ◽

10.25105/jat.v6i1.4869 ◽

2019 ◽

Vol 6 (1) ◽

pp. 19

Author(s):

Mayasari Mayasari ◽

Ayu Yuliandini ◽

Intan Indah Permatasari

Keyword(s):

Corporate Governance ◽

Earnings Management ◽

Firm Size ◽

Stock Exchange ◽

Sampling Technique ◽

Earning Management ◽

Managerial Ownership ◽

Company Size ◽

Negative Effect ◽

Positive Effect

The purpose of this study is to examine the influence of GCG variables, firm size, and leverage on earnings management. The sample used is 35 public listed property and real estatecompanies in the Indonesia Stock Exchange (IDX) from 2015 until 2017. The sampling technique uses purposive sampling. This study uses multiple regression. The results of the analysis showed that managerial ownership does not have a negative effect on earnings management but oppositely, it has a positive effect on earnings management, while company size does not have any effect on earning management.

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MEKANISME GOOD CORPORATE GOVERNANCE, UKURAN PERUSAHAAN, STRUKTUR KEPEMILIKAN MANAJERIAL DAN LEVERAGE PADA MANAJEMEN LABA PADA EMITEN PERBANKAN DI BURSA EFEK INDONESIA

Jurnal Riset Manajemen dan Bisnis ◽

10.21460/jrmb.2015.101.352 ◽

2015 ◽

Vol 10 (1) ◽

pp. 1

Author(s):

Rowland Pasaribu ◽

Dionysia Kowanda ◽

Muhammad Firdaus

Keyword(s):

Corporate Governance ◽

Earnings Management ◽

Firm Size ◽

Audit Committee ◽

Audit Quality ◽

Stock Exchange ◽

Sampling Technique ◽

Earning Management ◽

Managerial Ownership ◽

Good Corporate Governance

ABSTRACT This reseach amied at knowing the influence of audit quality, propotion of independent commissioner, audit committe, firm size, managerial ownership and leverage. It used purposive sampling technique or choosing samples based on certain criteria. The sample of this research was 25 companies of banking industry in indonesia stock exchange period 2008-2012. Descriptive analysis, classical test, as well as multiple linear regression by examining the hypothesis using SPSS 20.0 were used to analyzed the data. The result shows that (1) all independent variables simultaneously hasinfluence on earnings management; (2) however partially audit committee, audit quality, managerial ownership and leverage do not affect significantly to earnings management; (3) only firm size and independent commissioner that affect significantly to earning management. Keywords: Earning Management, Good Corporate Governance, Firm Size, BankingABSTRAK Penelitian ini bertujuan untuk menganalisis dan menguji secara empiris signifikansi parsial dan simultan dari kualitas audit, komisaris independensi audit, komite audit, ukuran perusahaan, struktur kepemilikan, dan leverage terhadap manajemen laba pada emiten perbankan di bursa efek Indonesia periode 2008-2012. Teknik analisis yang digunakan adalah multiregresi. Hasil studi menunjukkan bahwa secara simultan seluruh variabel independen berpengaruh signifikan sedangkan secara parsial hanya ukuran perusahaan dan komisi independensi audit yang berpengaruh signifikan terhadap manajemen laba. Kata Kunci: Manajemen Laba, Mekanisme Tata Kelola, Ukuran Perusahaan, Perbankan,

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Ownership Structure and Earnings Management

GATR Journal of Accounting and Finance Review (AFR) Vol. 4 (4) Oct-Dec 2019 - GATR Accounting and Finance Review ◽

10.35609/afr.2019.4.2(1) ◽

2019 ◽

Vol 4 (2) ◽

pp. 38-42

Author(s):

Nico Alexander

Keyword(s):

Earnings Management ◽

Ownership Structure ◽

Stock Exchange ◽

Institutional Ownership ◽

Foreign Ownership ◽

Jel Classification ◽

Managerial Ownership ◽

Manufacturing Companies ◽

Management Ownership ◽

Independent Variable

Objective – The purpose of this research is to analyze the effect of ownership structure toward earnings management. Methodology/Technique – The population of this research consist of manufacturing companies listed on the Indonesian Stock Exchange (IDX) from 2014 to 2016. This research uses 3 recent years and adds variables that have not been used in prior research. The sample of this research is chosen using a purposive sampling method. Findings – The hypothesis is tested by multiple regressions using an Eviews program to investigate the influence between each independent variable to earnings management. Novelty – The research results shows that institutional ownership, controlling ownership, and foreign ownership affect earnings management whilst managerial ownership has no effect on earnings management. Type of Paper: Empirical. Keywords: Earnings Management; Ownership Structure; Institutional Ownership; Controlling Ownership; Foreign Ownership. Reference to this paper should be made as follows: Alexander, N.; 2019. Ownership Structure and Earnings Management, Acc. Fin. Review 4 (2): 38 – 42 https://doi.org/10.35609/afr.2019.4.2(1) JEL Classification: G40, G41, G49.

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Perilaku Manajemen Laba Berdasarkan Siklus Hidup Perusahaan

JURNAL EKSPLORASI AKUNTANSI ◽

10.24036/jea.v1i3.144 ◽

2019 ◽

Vol 1 (3) ◽

pp. 1307-1321

Author(s):

Chyntya Lisnawati ◽

Nurzi Sebrina

Keyword(s):

Life Cycle ◽

Earnings Management ◽

Sampling Method ◽

Stock Exchange ◽

Descriptive Analysis ◽

Secondary Data ◽

Earning Management ◽

Manufacturing Companies ◽

Real Earning ◽

Start Up

This study aims to examine earnings management behavior is based on the company life cycle. This study is classified as comparative research. The population in this study are manufacturing companies listed on the Indonesian Stock Exchange period of 2013 to 2017. By using purposive sampling method, there were 61 companies as the research’s sample. Earning managements is measured through accrual earnings management and real earning management. Company life cycle is measured using the company cash flow. The type of data used is secondary data obtained from www.idx.co.id and used is descriptive analysis. The results of this study indicate that:1) company in the start up, growth, mature and decline stages tend to use real earning management, 2)there is no decrease in earnings management as the life cycle changes from start up, growth, mature and decline stages

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Ownership structure and real earnings management: An empirical study on emerging economy

Corporate Ownership and Control ◽

10.22495/cocv18i2art6 ◽

2021 ◽

Vol 18 (2) ◽

pp. 74-89

Author(s):

Nitai Chandra Debnath ◽

Suman Paul Chowdhury ◽

Safaeduzzaman Khan

Keyword(s):

Earnings Management ◽

Ownership Structure ◽

Stock Exchange ◽

Institutional Ownership ◽

Foreign Ownership ◽

Least Square ◽

Real Earnings Management ◽

Inside Ownership ◽

Price Discounts ◽

Least Square Regression

We observe the association amid ownership structure and real earnings management in Bangladesh. Our study takes 2195 firm-year observations which are listed on the Dhaka Stock Exchange over the period of 2000-2017. The outcome of the panel least square regression indicates that inside ownership, as well as foreign ownership, is inversely related to real earnings management, whereas institutional ownership is positively related to real earnings management. In particular, firms tend to reduce discretionary expenses to manage earnings if the magnitude of inside ownership is low. In contrast to that, when firms are characterized by more institutional ownership, they are more inclined towards real earnings management through additional price discounts, offering a more friendly credit facility, and lowering discretionary expense. This result is consistent with previous findings. Nevertheless, if firms encounter an absence of foreign ownership, they prefer to manage earnings through operating at over-production levels as well as lowering discretionary expenses. Additionally, we find that corporate governance is playing a beneficial role in limiting real earnings management

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Detecting Earning Management: Deferred Taxes vs Accruals: A Pakistani Perspective

Journal of Accounting and Finance in Emerging Economies ◽

10.26710/jafee.v1i2.68 ◽

2015 ◽

Vol 1 (2) ◽

pp. 111-134

Author(s):

Imran Shanwari ◽

S. M. Aamir Shah

Keyword(s):

Earnings Management ◽

Stock Exchange ◽

Earning Management ◽

Probit Regression ◽

Management Activity ◽

Cross Sectional ◽

Deferred Taxes ◽

The Past ◽

Areas Of Concern ◽

Deferred Tax

Objective: Earning Management has been one of the major areas of accounting research which has received a great attention in the past and also quite recently. Detecting earning management has always been one of the major areas of concern for the researchers. Earnings Management is pervasive. There are a number of models available to Detect and measure the earnings management activity. Methodology: The accrual models are the most used models to proxy the discretionary accruals and the earnings management. The effectiveness of the accrual models is somewhat skeptical at times when researchers found some inconsistencies in results while using the accrual models. The researchers are still finding some better and effective model that can be used to better measure and capture the earnings management activity. The focus of this study is to find out as to whether a deferred tax as compared to accrual models is more useful in measuring or detecting the earnings management in Pakistani perspective. The study is based on the Pakistani companies listed on the Karachi Stock Exchange (KSE). This study is expected to be an addition to the existing research as to whether the models used for detecting earnings management through deferred taxes by Philips et al (2003) are also applicable to Pakistani Scenario which is a developing country. The study used Probit Regression Model with pooled cross sectional data to measure the usefulness of both; accruals and deferred taxes (the proxies) used as better measure for Earnings management. Results: The results of the study are inconsistent with the Philips et al. (2003) study. Based on this study it is concluded that deferred tax is not incrementally useful along with the other accrual measure. The accruals models show significant results and are more powerful metric to detect earnings management as compared to the deferred taxes in Pakistan.

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THE INFLUENCE OF AUDIT COMMITTEE AND OWNERSHIP STRUCTURE ON EARNINGS MANAGEMENT

Jurnal Dinamika Akuntansi ◽

10.15294/jda.v8i1.9114 ◽

2017 ◽

Vol 8 (1) ◽

pp. 1

Author(s):

Metta Kusumaningtyas ◽

Dessy Noor Farida

Keyword(s):

Earnings Management ◽

Ownership Structure ◽

Audit Committee ◽

Stock Exchange ◽

Institutional Ownership ◽

Managerial Ownership ◽

Manufacturing Companies ◽

Public Ownership ◽

Discretionary Accrual ◽

Negative Effect

The objective of this study is to analyze the influence of audit committee characteristics and ownership structure on earnings management. The characteristics which are used to measure the effectiveness of the audit committee are audit committee independence, audit committee competency, audit committee activity and audit committee size. Ownership structures are characteristics of public ownership, institutional ownership, and managerial ownership. Earnings management in this study were measured by using the value of discretionary accrual. The population in this study is manufacturing companies listed on the Indonesia Stock Exchange (BEI) in 2007-2012. Based on purposive sampling method, the number of samples in this study was 66 samples. Testing the hypothesis used multiple regression analysis. The results indicate that audit committee independent, audit committee size and institutional ownership had a significant negative effect on earnings management. Instead the others variables such as audit committee competency, audit committee activity, public ownership and managerial ownership did not influenced on earnings management.

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Real earnings management and borrowing costs: The moderating effect of the directors’ and officers' liability insurance

10.47260/amae/1153 ◽

2021 ◽

pp. 51-71

Author(s):

Jui-I Chang ◽

Chen-Ying Lee ◽

Gene-Tu Lin

Keyword(s):

Earnings Management ◽

Manufacturing Industry ◽

Moderating Effect ◽

Liability Insurance ◽

Real Earnings Management ◽

Earning Management ◽

Borrowing Costs ◽

Real Earning ◽

Borrowing Cost ◽

Directors And Officers

Abstract The purpose of this paper is to investigate the effects of real earnings management on firm borrowing cost of public-listed in Taiwanese manufacturing industry during 2010 to 2017, and also examines the moderating effect of the directors’ and officers’ liability insurance (D&O insurance) on real earnings management and borrowing costs. The empirical results show that borrowing cost is positively related to real earning management but negatively related to D&O insurance purchase. Therefore, the firms with D&O insurance than those without have lower borrowing costs, but the higher the D&O insurance amount, the higher the borrowing costs. Furthermore, D&O insurance has a moderating effect between the real earnings management and borrowing costs. Our findings suggest the relationship between D&O insurance and real earning management, which through the D&O insurance purchasing decision to impact on corporate borrowing costs. JEL classification numbers: G22, G32, M41. Keywords: Real earnings management, Directors’ and officers' liability insurance, Borrowing costs, Moderating effect.

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