Audit Committee Chair’s Legal Expertise and Real Activities Manipulation: Empirical Evidence From Malaysian Energy and Utilities Sectors

Ghaleb, Belal Ali Abdulraheem; Al-Duai, Shaker Dahan; Hashed, Abdulwahid Ahmed

doi:10.32479/ijeep.10258

Cited by 19 publications

(21 citation statements)

References 52 publications

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“…Further, Eng et al (2019) argue that the aggregate measure of REM would better capture earnings management activity than any single measure of REM. Therefore, this study applies an aggregate measure of REM by summing the standardised residuals values of these three proxies to give a single measure of firms' overall REM using Equation (4) (Alhebri & Al-Duais, 2020; Cohen et al, 2008;Ghaleb et al, 2021).…”

Section: Measurement Of Dependent Variablementioning

confidence: 99%

Corporate social responsibility, board gender diversity and real earnings management: The case of Jordan

Ghaleb

Qaderi

Almashaqbeh³

et al. 2021

Cogent Business & Management

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This study examines the relationship between corporate social responsibility (CSR) reporting, board gender diversity (BGEND) and real earnings management (REM). It also investigates how the relationship between CSR reporting and REM differs between gender-diverse and non-diverse firms. Content analysis was used to measure CSR reporting. The ordinary least square regression is used to examine the relationships for a sample of 475 firm-year observations listed on the Amman Stock Exchange during 2011-2016. The results show that CSR reporting is significantly and negatively associated with REM in the Jordanian market. Nevertheless, BGEND is negatively and significantly related to REM. More importantly, the results show that BGEND moderates the CSR-REM relationship. Further,

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Section: Measurement Of Dependent Variablementioning

confidence: 99%

Corporate social responsibility, board gender diversity and real earnings management: The case of Jordan

Ghaleb

Qaderi

Almashaqbeh³

et al. 2021

Cogent Business & Management

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“…The ACSIZ measure is based on the overall number of audit committee directors, ACEXP by the ratio of audit committee directors have financial expertise, ACIND by the ratio of independent audit committee members, ACMET the total number of audit committee meetings held throughout the year and ACGND by the proportion of female directors on the audit committee (Ghaleb et al, 2021a;Wan Mohammad and Wasiuzzaman, 2020;Zalata et al, 2018;Zgarni et al, 2016).…”

Section: Measurement Of Real Earnings Managementmentioning

confidence: 99%

Ownership structure and real earnings management: evidence from an emerging market

Al-Duais

Malek

Hamid

et al. 2021

JAEE

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PurposeThis study aims to investigate the monitoring role of ownership structure (OWS) on real earnings management (REM) practices; previous studies primarily examined the effect of OWS on accrual-based earnings management.Design/methodology/approachThe sample of this study is 490 companies listed on the Malaysian Stock Exchange during the period 2013–2016 (1,960 company-year observations). The regression of a feasible generalized least square was used for data analysis. The authors use three regression models ordinary least squares, panel-corrected standard errors and Driscoll–Kraay standard errors to corroborate the findings and also examine alternative REM measures.FindingsAnalysis of the data shows that family, foreign and institutional ownership has a positive link with the quality of financial reporting and, to a large extent, is capable of alleviating REM. The findings also indicate that some form of OWS significantly affects REM, corroborating existing theories on corporate governance (CG) and the perspectives of practitioners.Practical implicationsThe evidence concerns the significant role played by the OWS in reducing REM activities. The findings are useful in support of regulatory activities, particularly in the design of policies to regulate the OWS. The results may also provide useful insights to inform other policymakers, investors, shareholders and researchers about the active role of family, foreign and institutional investors in monitoring Malaysia's public listed companies (PLCs) to strengthen CG practices. This also leads to less REM and enhances the quality of financial reporting.Originality/valueTo the authors' knowledge, this work is pioneering research from a developing country, specifically from Malaysia, to investigate the manner in which all possible OWSs influence REM. More importantly, the study recommends that regulators and researchers do not envisage OWS as a holistic phenomenon.

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“…The values of these proxies are estimated as residuals of three regressions: equations ( 1)-(3). We follow recent studies in calculating overall REM (Alhebri and Al-Duais, 2020;Cohen et al, 2008;Eng et al, 2019;Ghaleb et al, 2021a) through the aggregate measure of the three residuals mentioned above. Aggregating the three REM measures helps to capture companies' overall REM (Chi et al, 2011;Eng et al, 2019).…”

Section: Rem Estimationmentioning

confidence: 99%

Investment in outside governance monitoring and real earnings management: evidence from an emerging market

Ghaleb

Kamardin

Hashed

2021

JAEE

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PurposeThe main aim of this study is to examine the effect of investment in outside governance monitoring (IOGM), through non-executive directors' remuneration (NEDR) and external audit fees (AFEE), on real earnings management (REM) in an emerging market in the Southeast Asia region, Malaysia.Design/methodology/approachThe data comprises 1,056 observations from manufacturing companies listed on Bursa Malaysia for the four-year period, 2013 to 2016. The study tests IOGM individually and aggregately with REM. Feasible generalized least squares (FGLS) regression is used to test the hypotheses.FindingsThe results show that NEDR is negatively and significantly associated with REM. Likewise, AFEE is significantly associated with lower REM. Aggregate IOGM significantly mitigates REM. Additional tests conducted show consistent findings.Research limitations/implicationsThis evidence supports agency theory and signaling theory, that a high level of investment in governance monitoring signals a high demand for monitoring and fewer agency problems. It justifies more investment in outside scrutiny and monitoring to limit the existence of managers' opportunistic behavior in concentrated markets. This study relies on an aggregate measure of REM and focuses on manufacturing companies in Malaysia; thus, the results may not be the same using other measurements and samples.Originality/valueThe study, to the best of the researchers' knowledge, is the first to document evidence in an emerging market suggesting that higher NEDR and AFEE are individually and aggregately associated with lower REM. Policymakers, shareholders and researchers may consider investment in these two mechanisms as a proxy of high-quality monitoring that mitigates REM.

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Audit Committee Chair’s Legal Expertise and Real Activities Manipulation: Empirical Evidence From Malaysian Energy and Utilities Sectors

Cited by 19 publications

References 52 publications

Corporate social responsibility, board gender diversity and real earnings management: The case of Jordan

Corporate social responsibility, board gender diversity and real earnings management: The case of Jordan

Ownership structure and real earnings management: evidence from an emerging market

Investment in outside governance monitoring and real earnings management: evidence from an emerging market

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