scholarly journals Earning Management: From Agency and Signalling Theory Perspective in Ethiopia

2019 ◽  
pp. 1-12
Author(s):  
Kirubel Asegdew Yimenu ◽  
Sitina Akmel Surur
Keyword(s):  
Agency Theory ◽  
Audit Quality ◽  
Negative Impact ◽  
Management Practice ◽  
Addis Ababa ◽  
Random Effect ◽  
Earning Management ◽  
Research Approach ◽  
Manufacturing Companies ◽  
Signalling Theory

Aims: To examine earning management from agency and signalling theory perspectives. Agency theory was used as a clogging factor for earning management practice whereas, signalling theory relates to managements intention to reflect insider information for the market. Study Design: Considering the nature of the problem, explanatory research design with mixed research approach was employed. Place and Duration of Study: Sample: large manufacturing companies from the period of 2009 to 2017, Addis Ababa, Ethiopia. Methodology: The study used audited financial reports of 14 large manufacturing companies in Addis Ababa operating from the period of 2009 to 2017 for which random effect regression model was used. Results: From agency theory proxies, leverage and audit quality had significant positive and negative impact respectively on earning management. The finding for signalling theory proxies showed that, size of the firm had a positive significant relationship with earning management. Conclusion: The study concluded that signalling and agency theories partially explained earning management in Ethiopian Large Manufacturing Share companies. Originality/value: There were numerous studies explaining earning management from signalling and Agency theory self-reliantly, but this study has modeled earning maneuver motives of management (signalling motive) and controlling mechanisms (Agency theory proxies) set by stakeholders, in one model. Further, the study was conducted in developing country perspective with lower legal requirement on information asymmetry, higher reporting laxity and non-standard/mixed reporting experience.

scholarly journals KOMITE AUDIT SEBAGAI PEMODERASI PENGARUH WORKLOAD DAN MASA PERIKATAN AUDIT PADA KUALITAS AUDITe

2016 ◽  
Author(s):  
Theresia Julina Rusli ◽  
I Dewa Nyoman Wiratmaja
Keyword(s):  
Audit Committee ◽  
Sampling Method ◽  
Audit Quality ◽  
Negative Impact ◽  
Positive Impact ◽  
Stock Exchange ◽  
Manufacturing Companies ◽  
Quality Audit ◽  
Final Sample ◽  
The Impact

This  research  aims to find empirical evidence  about the impact  of  workload  and  audit tenure  on  audit quality  and  using audit  committee  as  a  moderating  variable. This  research  focused  on  manufacturing companies  that  listed  on  the  Indonesia Stock Exchange. Sample was collected using   purposive sampling method and resulted 31  companies as a final sample.  The  data are analyzed by using Moderated Regression Analysis (MRA). The results of  this research indicate  that the  workload  has a negative  impact on  audit quality.  Audit tenure has a positive impact on audit quality. Audit committee reduces the negative impact of workload on audit quality. And audit committee reduces the positive impact of audit tenure on audit quality.

scholarly journals Earnings management determinants: A study of Egyptian listed firm characteristics post the Egyptian revolution

2021 ◽  
Vol 5 (2, special issue) ◽  
pp. 165-166
Author(s):  
Engy ElHawary ◽  
Dina Hassouna
Keyword(s):  
Earnings Management ◽  
Management Practices ◽  
Audit Quality ◽  
Stock Exchange ◽  
Management Practice ◽  
Earning Management ◽  
Firm Characteristics ◽  
Financial Leverage ◽  
Egyptian Revolution ◽  
The Relationship

This research aims to look at how firm characteristics and audit quality can affect the earning management practices in the Egyptian context, within the period of 2011–2019. This period was after the Egyptian revolution and has not been well investigated in Egypt, especially after the new release of corporate governance rules for listing firms. A sample of 157 non-financial listed companies in the Egyptian stock exchange is selected for achieving the research objective through analysing their financial reports. The panel least squares, using the fixed-effect model, is used to test the hypotheses and investigate the relationship between discretional accruals and firm characteristics, where the dependent variable is the earnings management, measured by the discretionary accruals and the independent variables are the firm characteristics (size, financial leverage, age, survival and audit quality). The results illustrate that the relationship between a firm’s financial leverage and earnings management is positive. This study may help the firms to control their financial leverage for avoiding any earnings management practice. The stakeholders should notice such significant firm characteristics in making their own decisions, especially after the COVID-19 pandemic crisis, which may expectedly increase the firm financial leverage, and in turn, some earning management practices can be used intentionally to hide the bad firm performance

scholarly journals Corporate Governance And Tax Aggressiveness: Agency Theory Relationship

2021 ◽  
Vol 11 (1) ◽  
pp. 138-149
Author(s):  
Bani Alkausar ◽  
Farel Badar Kawakibi ◽  
Mienati Somya Lasmana
Keyword(s):  
Corporate Governance ◽  
Agency Theory ◽  
Audit Committee ◽  
Audit Quality ◽  
Stock Exchange ◽  
Institutional Ownership ◽  
Manufacturing Companies ◽  
Effective Tax Rate ◽  
Tax Rate ◽  
Tax Aggressiveness

The study aimed to provide evidence of whether corporate governance can lower the tendency of companies to perform tax aggressiveness. The term of Tax Aggressiveness was used to further expand the meaning of the act of minimizing taxes by companies. The cash effective tax rate was used as an indicator of the tax aggressiveness of companies. Meanwhile, corporate governance was measured by the institutional ownership, independent commissioner, audit committee, and audit quality. Samples used were the manufacturing companies listed on the Indonesia Stock Exchange (BEI) in 2018. Results of the 97 samples observed indicated that independent commissioners proved to be able to suppress the tendency of companies to commit Tax Aggressiveness; meanwhile, the institutional ownership, audit committee, and audit quality was not proven. The existence of the independent commissioners is able to influence the decisions in creating policies that are set by the management, so the management does not perform an opportunistic action that would benefit the management including committing Tax Aggressiveness.

HOW FIRMS ABSORB EXTERNAL KNOWLEDGE — MODELLING AND MANAGING THE ABSORPTIVE CAPACITY PROCESS

2019 ◽  
Vol 23 (01) ◽  
pp. 1950041 ◽  
Author(s):  
DJERDJ HORVAT ◽  
CARSTEN DREHER ◽  
OLIVER SOM
Keyword(s):  
Absorptive Capacity ◽  
Management Practice ◽  
Black Box ◽  
Process Research ◽  
External Information ◽  
Research Approach ◽  
Manufacturing Companies ◽  
Comparative Case Studies ◽  
A Company ◽  
Insight Into

This paper contributes to the literature and management practice by opening the “black box” of firms’ absorptive capacity (AC) processes. Following a process research approach and based on in-depth comparative case studies of four German manufacturing companies, we develop and empirically validate a procss model of the firm-internal AC process. Our model integrates the different single elements (e.g., individuals, teams, departments) as well as the different linear and nonlinear causal interactions that constitute the firm’s ability to identify, adopt, implement and exploit external information and knowledge. Furthermore, the paper elaborates on various organizational leverages to increase the effectiveness of the identified process flows. The findings provide explanatory insight into the organisational prerequisites of AC. Thus, the paper simultaneously contributes to enhance the academic and management’s understanding of firms’ AC by identifying its constitutional key elements, their different kinds of processual interrelation as well as organisational prerequisites and points of leverage to modify, measure, and improve the AC of a company.

scholarly journals PENGARUH GOOD CORPORATE GOVERNANCE, KUALITAS AUDIT DAN UKURAN PERUSAHAAN TERHADAP MANAJEMEN LABA (Studi Empiris Perusahaan Properti dan Real Estate listing di Bursa Efek Indonesia)

2020 ◽  
Vol 13 (1) ◽  
pp. 27-35
Author(s):  
Heni Pujiastuti
Keyword(s):  
Corporate Governance ◽  
Real Estate ◽  
Audit Quality ◽  
Annual Report ◽  
Negative Impact ◽  
Stock Exchange ◽  
Earning Management ◽  
Financial Report ◽  
Good Corporate Governance

This study aims to examine the effect of good corporate governance, audit quality, and size company against earning management. Data used in this study is annual report and audited financial report from each company, published through website www.idx.co.id. The sample used in this study are property and real estate companies listed in Indonesian Stock Exchange (IDX) during 2013 up to 2015 resulted 96 observations. The Study shows that audit quality has the significant and negative impact toward earning management. While independent commissioner, institutional shares, managerial shares and size company haven’t significant effect toward earning management.

scholarly journals The Effect of Related Party Transactions through Opportunistic Behaviour Management to Increase Firm Value

2019 ◽  
Vol 4 (2) ◽  
pp. 64-72
Author(s):  
Arna Suryani ◽  
Atikah Atikah ◽  
Hana Tamara Putri
Keyword(s):  
Earnings Management ◽  
Firm Value ◽  
Negative Impact ◽  
Positive Impact ◽  
Stock Exchange ◽  
Earning Management ◽  
Manufacturing Companies ◽  
Behaviour Management ◽  
Related Party Transactions ◽  
Opportunistic Behaviour

Objective – This research aims to determine and analyze related party transactions to increase firm value through opportunistic behaviour management by conducting earnings management on manufacturing companies listed on the Indonesian Stock Exchange between 2015 and 2018. Methodology/Technique – There are 34 companies that fulfill the requirements to become the sample of this study. The method applied in analyzing the data is verification using path analysis. Findings – The results of the research show that related party transactions do not have any significant effect on firm value however it indicates a positive impact. Moreover, related party transactions do not have any significant impact on earning management yet it gives a negative impact on earning management. Novelty – The influence of earnings management shows a positive impact on firm value while it shows no signs of positive impact on firm value. The analysis shows that the value of the indirect impact of related party transactions through earnings management towards firm value is negative being 0.022 smaller than the direct impact of related party transaction toward firm value which is 0.053. This indicates that related party transactions through earnings management have no significant impact on firm value. Type of Paper: Empirical. Keywords: Related Party Transactions; Earnings Management; Firm Value. Reference to this paper should be made as follows: Suryani, A., Atikah; Putri, H. T. 2019. The Effect of Related Party Transactions through Opportunistic Behaviour Management to Increase Firm Value, J. Fin. Bank. Review 4 (2): 64 – 72 https://doi.org/10.35609/jfbr.2019.4.2(3) JEL Classification: G02, G30, G32, G39.

scholarly journals Pengaruh PSAK 50/55 (Revisi 2014) Berbasis IFRS dan Kualitas Audit Terhadap Manajemen Laba

2017 ◽  
Vol 6 (3) ◽  
pp. 211
Author(s):  
Nazarudin Nazarudin ◽  
Joko Suseno
Keyword(s):  
Sampling Method ◽  
Management Practices ◽  
Audit Quality ◽  
Stock Exchange ◽  
Secondary Data ◽  
Financial Statements ◽  
Earning Management ◽  
Manufacturing Companies ◽  
Independent Variables

The aim of this study is to analyze the effect of the implementation of the IFRS-based PSAK 50 and 55 (revised 2014) and the audit quality of earning management. Both independent variables, the implementation of IFRS-based PSAK 50/55 (Revised 2014) and the audit quality, are dummy variables. In this study, to measure the earning management this research using revenue discretionary model calculated by using conditional revenue model introduced by Stubben (2010). The sample is secondary data derived from annual financial statements at manufacturing companies listing on Indonesia Stock Exchange (BEI) in 2014-2015. The sample has been taken by purposive sampling method that follow the population criteria. The population are the manufacturing companies by 97 companies for 2 years (2014-2015) as sample. The statistical analysis have been used are multiple linear regression and t-test different test. The findings show that both the implementation of the IFRS-based PSAK 50/55 (Revised 2014) and the audit quality have had a significantly and negatively effect on the earning management practices.

scholarly journals Pengaruh Free Cash Flow Dan Kualitas Audit Terhadap Manajemen Laba

2013 ◽  
Vol 4 (2) ◽  
pp. 105
Author(s):  
Dian Agustia
Keyword(s):  
Earnings Management ◽  
Cash Flow ◽  
Audit Quality ◽  
Stock Exchange ◽  
Free Cash Flow ◽  
Earning Management ◽  
Manufacturing Companies ◽  
Multiple Regression Method ◽  
The Impact ◽  
Research Period

AbstractAsymmetric information refers to a situation where one party has more information than the other party. The agency problems arise from asymmetric information in the principal agent contracts. In addition, there are also several factors that could affect earnings management that is free cash flow and audit quality. The aim of this research is to provide empirical evidence about the impact of free cash flow and audit quality variables on discretionary accruals, as a measure of Earnings Management with the control variables company’s size. This research used 103 manufacturing companies listed in Indonesia Stock Exchange, selected using purposive sampling method, during the research period 2007-2011. Data were analyzed using multiple regression method. Based on the result of analysis concluced that the variable independent free cash flow have a negative and significant effect on earning management. It means that companies with high free cash flow will restrict the practice of earnings management. While the audit quality no significance effect on earning management.

scholarly journals AUDIT QUALITY, AUDIT COMMITTEE, INSTITUTIONAL OWNERSHIP AND INDEPENDENT DIRECTOR ON EARNING MANAGEMENT

2021 ◽  
Vol 13 (1) ◽  
pp. 42-50
Author(s):  
Ni Putu Desy Cristiana Yanthi ◽  
Dudi Pratomo ◽  
Kurnia Kurnia
Keyword(s):  
Earnings Management ◽  
Audit Committee ◽  
Audit Quality ◽  
Institutional Ownership ◽  
Audit Committees ◽  
Earning Management ◽  
Independent Director ◽  
Observation Data ◽  
Manufacturing Companies ◽  
Quality Audit

This study aims to analyze audit quality, audit committees, institutional ownership and independent director on earnings management at manufacturing companies listed on the Indonesia Stock Exchange in 2012-2016. The sampling method use purposive sampling for 5 years so its obtained 160 observation data samples. The results in this study indicate that earnings management that occur is the type of income decreasing. Simultaneously audit quality, audit committee, institutional ownership and independent directors significantly influence on income decreasing. Partially, audit quality and independent director variables have a negative effect on income decreasing. While audit committee independence has a positive effect on income decreasing. Furthermore, audit quality, audit committees, and institutional ownership have no effect on earning management type income decreasing.

scholarly journals PENGARUH REAL EARNING MANAGEMENT TERHADAP ARUS KAS OPERASI PERUSAHAAN DENGAN KUALITAS AUDIT SEBAGAI VARIABEL MODERASI (Studi pada Perusahaan Manufaktur yang Terdaftar di BEI)

MODUS ◽  
2016 ◽  
Vol 27 (1) ◽  
pp. 65 ◽  
Author(s):  
Felicianus Adi Nugroho ◽  
Dewi Ratnaningsih
Keyword(s):  
Earnings Management ◽  
Audit Quality ◽  
Stock Exchange ◽  
Predictive Ability ◽  
Real Earnings Management ◽  
Earning Management ◽  
Manufacturing Companies ◽  
Management Actions ◽  
The Relationship

This study aims to determine the efect of real earnings management which is a proxy of earnings management to the predictive ability of fnancial reports through the company’s operating cash fow. Researchers also consider the infuence exerted by the quality of audits of the relationship between real earnings management with the company’s operating cash fow. Samples are manufacturing companies listed in Indonesia Stock Exchange during the period of observation 2010-2012.Berdasarkan criteria previously set contained 249 corporate data used in this study. The results of this study revealed that real earnings management has an infuence on the predictive ability of fnancial statements through operating cash fow. Quality audits can also afect earnings management actions undertaken by the company and consequently also of the operating cash fow of the company. Overall audit quality may afect the actions of earnings management and certainly also the predictive ability of corporate fnancial statements.Keywords: real earnings management, operating cash fow, and audit quality.

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