Management
Dyna Rachmawati; Magdalena Jayati Marinda Janggu
Abstract
This study aims to examine the role of business strategy in the relationship between earnings management and MD&A readability. Previous research has shown inconsistency of results in testing the effect of earnings management on MD&A readability. This inconsistency can be caused by the fact that ...
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This study aims to examine the role of business strategy in the relationship between earnings management and MD&A readability. Previous research has shown inconsistency of results in testing the effect of earnings management on MD&A readability. This inconsistency can be caused by the fact that the business strategy variable has not been included as a contextual basis for the implementation of operational activities. Earnings management in this study is measured by real earnings management, because previous studies have used accrual earnings management. The hypotheses are tested with the multiple linear regression. The results show on 189 cross-sectional data on publicly traded consumer goods companies show that: (1) real earnings management reduces MD&A readability in defender and prospector companies; (2) analyzer companies perform real earnings management – discretionary expenses reduce the readability of MD&A; (3) firm size as a control variable in this study has no effect on the readability of MD&A. The results of this study imply that (1) strategy is a contextual factor that affects operational activities and ultimately on the readability of MD&A, (2) earnings management through discretionary expense activities reduces the readability of MD&A, regardless of the business strategy adopted by the company.
Sanam Bakhtiarnezhad
Volume 7, Issue 2 , February 2020, , Pages 73-85
Abstract
The current research was aimed to study the relationship between real earnings management and the stock price gap. Hence, 148 listed firms on the Tehran Stock Exchange have been studied from 2014-2018. Collected data through panel data were analyzed using estimated generalized least squares regression. ...
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The current research was aimed to study the relationship between real earnings management and the stock price gap. Hence, 148 listed firms on the Tehran Stock Exchange have been studied from 2014-2018. Collected data through panel data were analyzed using estimated generalized least squares regression. Furthermore, research hypotheses have been tested by statistical methods. Findings proved a positive significant correlation between real earnings management and stock price gap at the confidence level of 95%, that is to say, management of real earnings would lead to an increase in stock price gap.
Nur Anissa; Mukhlasin Mukhlasin; Thio Anastasia Petronila
Volume 6, Issue 6 , June 2019, , Pages 436-453
Abstract
Real earnings management reflects management intervention to manipulate earnings based on the company's normal business activities. This intervention is veiled and difficult to detect so it requires specialist auditors who expertise in industrial business practices. In the agency theory, the quality ...
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Real earnings management reflects management intervention to manipulate earnings based on the company's normal business activities. This intervention is veiled and difficult to detect so it requires specialist auditors who expertise in industrial business practices. In the agency theory, the quality auditors representing external governance serves to reduce asymmetric information between management and shareholders and minimize agency costs. Auditor quality is determined by the auditor's ability and independence to detect abnormal business practices. Industry specialization auditors have the competence, expertise, and skills to find out whether or not there are abnormal business practices for the purpose of earnings manipulation. Meanwhile, client importance that reflects the level of economic dependence of the auditor on the client encourages the auditor to be ignorant or tolerant of manipulation of business activities for the purpose of management opportunism. This research was conducted on manufacturing and trading companies listed on the Indonesia Stock Exchange in the 2012-2016 period. Observation is carried out on 430 data and analysis by multiple linear regression. The test results prove that the auditors of industrial specialization have a negative effect on real earnings management. Client importance also proved to have a positive effect on real earnings management.
Zabiholah Khani; Hossein Rajabdorri; Neda Sadri
Volume 6, Issue 2 , January and February 2019, , Pages 129-145
Abstract
The purpose of this study was to investigate the relationship between CEO’s (Chief Executive Officer) tenure, power and diligence with the management of earnings in companies admitted to Tehran Stock Exchange. This research is applied and includes 131 companies listed in Tehran Stock Exchange between ...
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The purpose of this study was to investigate the relationship between CEO’s (Chief Executive Officer) tenure, power and diligence with the management of earnings in companies admitted to Tehran Stock Exchange. This research is applied and includes 131 companies listed in Tehran Stock Exchange between 2013 and 2017. This research was tested in three hypotheses using multi variate regression in Eviwes software version 9. The findings of three hypotheses showed that among the independent and controlling variables, between CEO tenure (negative and significant), CEO’s (positive and significant), CEO’s diligence (negative and significant), market value to book value (negative and significant), the return on assets (negative and significant), and the size of the audit firm (negative and significant) have a meaningful relationship with real earnings management. As a result, it is imperative that managers and investors focus on this issue in order to see better management and investment.
