Accounting
Amos I Ganyam; Terungwa Azende; Luper Iorpev
Abstract
The primary focus of this study was to determine the effect of audit client importance on earnings management of Nigerian quoted consumer goods firms. The descriptive research design approach was adopted. From 2012 to 2019, data were obtained from 13 consumer goods firms quoted on the Nigerian Exchange ...
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The primary focus of this study was to determine the effect of audit client importance on earnings management of Nigerian quoted consumer goods firms. The descriptive research design approach was adopted. From 2012 to 2019, data were obtained from 13 consumer goods firms quoted on the Nigerian Exchange Group. The discretionary accrual approach was used to evaluate earnings management. Descriptive statistics and random effects regression were the main techniques used to analyse the study’s data. The findings indicated that audit client importance (β=-0.1872) has a negative and significant effect on the earnings management of Nigerian quoted consumer goods firms. The study concluded that earnings management practices of Nigerian quoted consumer goods firms are curtailed when the firms are of important clients to their auditors. The recommendation was that management of firms should enhance approaches that will improve their performance in terms of sales to remain important clients to their auditors.
Pizus Biswas
Volume 5, Issue 11 , November 2018, , Pages 829-848
Abstract
This research investigates the behavior of the managers of the Bangladeshi firms in applying Earnings manipulation through the technique of Accruals Earnings Management (AEM). This study examines whether the firm managers of Bangladesh involve themselves in earnings manipulation in the form of accruals ...
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This research investigates the behavior of the managers of the Bangladeshi firms in applying Earnings manipulation through the technique of Accruals Earnings Management (AEM). This study examines whether the firm managers of Bangladesh involve themselves in earnings manipulation in the form of accruals earnings management that whether they beat of meat the earnings benchmarks in the context of Return on Assets, Changes in Return on Assets, Earnings per Shares and Changes in Earnings per Shares. The modified Cross Sectional Jones (1991) model has been applied to estimate the proxy for accruals earnings management (Abnormal Accruals) by using a 1652 firm-years observations of 168 companies of 10 industries (excluding Banking Industry, Financial Institutions, Insurance Industries and Telecommunication industries) over the 15 years from 2002 to 2016. Managers of other variables of accruals earnings management activities, this research reports that there is no evidence of earnings manipulation in the form of accruals earnings management from the evidence from Bangladeshi firms.
Maya Ayu Safitri; Alwan Sri Kustono; Muhammad Miqdad
Volume 5, Issue 9 , September 2018, , Pages 738-750
Abstract
Earnings management (EM) is the choice of accounting policy by a manager to achieve multiple goals. EM activity can be divided into two types: accrual manipulation activity and real manipulation activity. However, both of these have a major difference: the accrual manipulation does not affect cash flow, ...
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Earnings management (EM) is the choice of accounting policy by a manager to achieve multiple goals. EM activity can be divided into two types: accrual manipulation activity and real manipulation activity. However, both of these have a major difference: the accrual manipulation does not affect cash flow, whereas real manipulation affects cash flow. Whether misleading or not to the users of financial statements, good or bad for the practice, controversy arises when earnings management is associated with morals / ethics. EM practices are suspected to arise due to agency problems arising from a conflict of interest between the principal and the agent. In accordance with agency theory, the function of the independent auditor can reduce agency problems. A qualified auditor, trusted to provide trust to stakeholders about the performance of management. High-quality auditors are more likely to detect dubious accounting practices. Thus, in the context of research, audit quality is often regarded as an antecedent variable and a variable that can reduce the occurrence of EM practice. Furthermore, the practice of Accrual Earnings Management (AEM) and Real Earnings Management (REM) in some empirical results turns out to be a substitution.
Farhad Azizi
Volume 5, Issue 7 , July 2018, , Pages 516-534
Abstract
Managers smooth profits for any reasons. One of the core objectives in earnings management is to create a more stable flow in order to support higher level of interest payable. More stable profit flow may view as lower risk, which may lead to higher stock price and less cost of borrowing. Earnings management ...
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Managers smooth profits for any reasons. One of the core objectives in earnings management is to create a more stable flow in order to support higher level of interest payable. More stable profit flow may view as lower risk, which may lead to higher stock price and less cost of borrowing. Earnings management also focuses on enterprise management inclination to enhance investors’ expectation and to reduce firm’s risk. Due to increased profit stability and reduced fluctuations, investors may provide more accurate prediction on future profits. The present research studies the effect of information asymmetry and mutual funds ownership on earnings management among companies listed in Tehran Stock Exchange. Research statistical population included all mutual funds during 2011-2016. This is an applied study in term of purpose; and it is essentially a descriptive-correlation study. The present research analyzes earnings management through using Dechow and Dichev model. The model deals with the relationship between accruals and cash flows to measure earnings management. Research results showed that information asymmetry has no effect on earnings management. In addition, there is a significant relationship between funds classification and earnings management, which may influence earnings management. Research results may be applied for all listed companies, investors, and stock exchange.
Mukhlasin Mukhlasin; Nur Anissa
Volume 5, Issue 6 , June 2018, , Pages 448-460
Abstract
The information asymmetry between management and owners raises an opportunistic attitude of management to attach importance to its own interests. In this case, investors need additional information in addition to financial statements as a signal that can reduce information asymmetry. This study aims ...
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The information asymmetry between management and owners raises an opportunistic attitude of management to attach importance to its own interests. In this case, investors need additional information in addition to financial statements as a signal that can reduce information asymmetry. This study aims to prove empirically about the influence of internal controls and ethics disclosures against possible fraudulent financial reporting. This study also examines the relationship between management intentions that are reflected in earnings management with fraudulent financial reporting. The sample in this research is 740 data consist of 708 data fraud and 32 data non fraud. The study was conducted in non-financial companies listed on the Indonesia Stock Exchange for the period 2012-2015. The result of logistic regression analysis proves that information asymmetry can be reduced by voluntary disclosure ie internal control disclosure and ethics disclosure. Voluntary disclosure negatively affects fraudulent financial reporting. However, this study fails to identify earnings management as a sign of management intentions that can reduce information asymmetry.
Daruosh Foroghi; Moslem Tahmasbi; Mohammad Zamani Bakhtiarvand
Volume 5, Issue 4 , April 2018, , Pages 244-259
Abstract
The present study investigates the relationship between accounting conservatism and earnings management using Benford's Law. In this study, the quantitative index of conservatism (cscore) by Khan & Watts (2009) was considered as the accounting conservatism. Target sample includes 363 listed companies ...
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The present study investigates the relationship between accounting conservatism and earnings management using Benford's Law. In this study, the quantitative index of conservatism (cscore) by Khan & Watts (2009) was considered as the accounting conservatism. Target sample includes 363 listed companies in Tehran Stock Exchange during 1999-2015. Divergence between the actual earning and loss frequencies and Benford' distribution has been taken into account. Chi-square and Z-statistic tests, regards to degrees of conservatism were applied. The results revealed that in companies with low or high levels of conservatism, distribution of earning and lose first to fourth digits follow Benford's law. However the distribution of first and second digits of earning, and first to fourth digits of losses differ from the expected distribution when there is an increase in conservatism. Divergence between the third and fourth digits and expected distribution reduced, when conservatism increases.
Mahmoud Nozarpour; Hamid Norouzi
Volume 2, Issue 6 , June 2015, , Pages 538-546
Abstract
The main goal of this study is to investigate the effect of capital structure and growth opportunities on earnings management in companies accepted in Tehran securities exchange during 2008 to 2013. Before data analysis, Chow test was applied to determine the appropriate model to estimate parameters ...
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The main goal of this study is to investigate the effect of capital structure and growth opportunities on earnings management in companies accepted in Tehran securities exchange during 2008 to 2013. Before data analysis, Chow test was applied to determine the appropriate model to estimate parameters and independent variables effect on dependent variable. Then, research hypotheses were tested through pooled data method. Research results showed that there is a significant relationship between capital structure index financial leverage and earnings management. Also, research showed that there is a nonlinear and significant relationship between growth opportunities and earnings management and growth opportunities have a significant effect on this relationship.
Helaluddin Ahmed; Md. Azim
Volume 2, Issue 4 , April 2015, , Pages 265-276
Abstract
This study has been done with the aim to identify whether there is any earnings management in the financial information of the cement industry in Bangladesh. Data have been composed from the annual reports of listed cement companies in Bangladesh covering the period of five years from 2009 to 2013. ...
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This study has been done with the aim to identify whether there is any earnings management in the financial information of the cement industry in Bangladesh. Data have been composed from the annual reports of listed cement companies in Bangladesh covering the period of five years from 2009 to 2013. A comparative time series analysis has been done along with the help of Beniesh Model. The study reveals that some companies involved with the earnings manipulation because there are signs of highly volatile revenue and operating profit. Since the scope of this study is to find out whether there any earnings management exists, an enormous scope for further researches are possible in this area to find out the factors influencing to earnings manipulation in the cement industry in Bangladesh.