Accounting
Thakoor Sharma Geerawo
Abstract
This study explores the variations in discretionary accruals’ specific earnings management practices across different industries and their implications for financial reporting quality. Discretionary accruals are part of earnings management which affect the quality of financial reporting. These ...
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This study explores the variations in discretionary accruals’ specific earnings management practices across different industries and their implications for financial reporting quality. Discretionary accruals are part of earnings management which affect the quality of financial reporting. These can distort financial statements and mislead stakeholders. Understanding how these practices differ among industries provides valuable insights for regulators, investors, and financial analysts. Yet, literature is overly scarce on specific industries which are most affected by discretionary accruals. Delving into information from a robust principles-based economy adopting IFRS, this paper addresses a research gap with a dataset spanning multiple industries over a multi-year period from 2013 to 2022. The Dechow, Kasznik, and Kothari models are employed to assess the extent of discretionary accruals within each industry. Based on winsorized mean and standard deviation, the industries which appeared most in the list of signed and absolute discretionary accruals were Energy and Financials followed closely by the Technology industry. Additionally, applying panel data regressions with multiple fixed effects, the size of a firm, equity ratio, asset turnover, and past profitability were significant in the models which influence discretionary accruals whereas the impact of liquidity was not statistically significant.
Accounting
Edwin Sitienei
Abstract
This study explores the relationship between corporate governance traits and discretionary accruals among non-financial firms listed in NSE. Our study discovered that the board size has a relatively insignificant negative impact on the discretionary accruals of non-financial firms listed in the NSE using ...
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This study explores the relationship between corporate governance traits and discretionary accruals among non-financial firms listed in NSE. Our study discovered that the board size has a relatively insignificant negative impact on the discretionary accruals of non-financial firms listed in the NSE using a sample of 44 publicly traded non-financial firms based on 2012-2021 data. The findings on board independence indicate a significant positive relationship at 10% significance. The results suggest that board independence doesn't reduce discretionary accruals in non-financial firms listed in NSE Kenya. The CEO duality, on the other hand, revealed a statistically positive insignificant effect on discretionary accruals, contrary to expectations. The research findings also pointed to income-decreasing accruals earnings management as depicted by a mean of -.083 discretionary accruals in the descriptive statistics. On the effects of board meetings on discretionary accruals, the study found an insignificant negative relationship. The findings of this study may be useful for regulators to re-evaluate their laws and mandates regarding firms and their corporate governance structure, as well as for legislators who have the power to nominate board members to select competent and knowledgeable personnel.
Accounting
Edwin Sitienei
Abstract
This study examines the relationship between Audit Committee Attributes and Changes in Financial Reporting Quality Among Manufacturing Firms in Kenya. Using a sample of publicly listed firms based on 2010-2018 data, our study finds that the expertise of the Audit Committee has an insignificant positive ...
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This study examines the relationship between Audit Committee Attributes and Changes in Financial Reporting Quality Among Manufacturing Firms in Kenya. Using a sample of publicly listed firms based on 2010-2018 data, our study finds that the expertise of the Audit Committee has an insignificant positive impact on the financial reporting quality of financial reports, measured by accrual quality. Audit committee size and financial reporting quality show mixed findings for two measures of financial reporting quality. The results show a positive, statistically significant effect between the size of the audit committee and discretionary accruals. On the contrary, the size of the audit committee shows a statistically positive insignificant relationship with accruals quality. Audit committee independence has a statistically significant effect on both accruals' quality and discretionary accruals as measures of financial reporting quality. Finally, audit committee meetings on the financial reporting quality show a negative nonsignificant relationship between audit committee meetings on both accruals' quality and discretionary accruals. The results of this research may be of interest for policymakers who have the authority over the appointment of audit committee members to choose independent and expert individuals, for regulators to reconsider their rules and mandate concerning corporations and their corporate governance structure.
Accounting
Abdullah Al Masud
Abstract
In an aim to assess financial reporting quality and its determining factors, this empirical research examined a randomly selected sample from food and allied sector of the Dhaka Stock Exchange (DSE), Bangladesh. As a rapidly growing industry of Bangladesh, the food and allied sector of DSE grabs a significant ...
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In an aim to assess financial reporting quality and its determining factors, this empirical research examined a randomly selected sample from food and allied sector of the Dhaka Stock Exchange (DSE), Bangladesh. As a rapidly growing industry of Bangladesh, the food and allied sector of DSE grabs a significant portion of market capitalization and attentions from security analysts. To make valuable decisions in relevant domains, the financial reporting quality of this sector matters for policymakers, investors and regulators and for corporate managers also. In this research, the financial reporting quality (FRQ) has been measured using the popular model developed by Dechow, Sloan and Sweeney, also known as Modified Jones Model (1995). A documentary analysis of the available audited financial statements and annual reports of randomly selected sample companies for six consecutive years (2015 to 2020) has been used as the primary data sources. Popular statistical tools like correlation studies, regression analyses etc. have been applied to find the statistical significance of the explanatory variables of this research. Fourteen factors have been examined for their effects on the quality of financial reports using a classical linear regression model. This research finds firm size, firm age, foreign ownership and leverage positively significantly determine financial reporting quality while the growth and board independence negatively significantly influential. The findings recommend managers to emphasize their attention on the significant factors to improve their financial reporting quality. Security analysts shall evaluate firms’ value based on the factors found significant in determining the quality of financial reports.
