Bank earnings management using loan loss provisions: comparing the UK, France, South Africa and Egypt

Ozili, Peterson K

doi:10.1108/jeas-02-2021-0024

Cited by 4 publications

(1 citation statement)

References 43 publications

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“…Bank memanfaatkan konsesi yang diberikan oleh standar akuntansi saat membentuk CKPN, sering disebut sebagai perataan laba (Albrahimi, 2020;Ozili, 2021;Skała, 2021). Uji mendalam yang dilakukan oleh Bouvatier et al (2014) menunjukkan bahwa dampak kegiatan perataan laba terutama terlihat pada bank dengan tingkat pendapatan operasional yang ekstrim, yaitu sangat tinggi atau sangat rendah.…”

Section: Pendapatan Bank Dan Kekuatan Prediksi Ckpnunclassified

Implikasi Penerapan Ifrs 9 Pada Daya Prediksi CKPN Terhadap Kerugian Kredit Bank

Heniwati

2023

accounting, auditing, information

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Changes in accounting standards affect the formation of loan loss provisions (LLP), which impacts bank reporting of actual credit losses. It is assumed that IFRS 9 with a forward-looking approach, produces a higher predictive power for LLP than it according to a backward-looking approach (IAS 39). This study compares the ability of LLP to predict bank actual credit losses between the periods of IAS 39 and IFRS 9. For this purpose, the study observes quarterly data of 3,022 data originating from a sample of banks in Indonesia (2,461) and Thailand (561) for the period IAS 39 (2018–2019) and IFRS 9 (2020–2021). This study applied some analyses, including the correlation and the general least squares method. The study results show that the predictive ability of PKP for the IFRS 9 period is higher than the IAS 39 period, which is consistent with the forward-looking ECL model. Furthermore, related to the interaction between standards and incentives, this study found that the predictive power of PKP regarding actual credit losses (KRG) in the IFRS 9 period was higher for banks with high-income levels but lower for large banks. The main limitation is that the study is a short period of IFRS 9 in both countries. The impact of implementing IFRS 9 can help regulators and associations of professional accountants in Indonesia and Thailand consider appropriate strategies to promote the application of IFRS 9. This research empirically observes the marginal impact of implementing IFRS 9 regarding forming loan loss reserves to predict KRG using data from ASEAN countries.

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Section: Pendapatan Bank Dan Kekuatan Prediksi Ckpnunclassified

Implikasi Penerapan Ifrs 9 Pada Daya Prediksi CKPN Terhadap Kerugian Kredit Bank

Heniwati

2023

accounting, auditing, information

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Bank Loan Loss Provisions Determinants in Non-Crisis Years: Evidence From African, European, and Asian Countries

Ozili

2024

SSRN Journal

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The effect of industry level characteristics and cross-country differences on earnings management: A European comparative perspective

Balios,

Katsikis,

Naoum

et al. 2024

JGR

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The current study examines the direction and intensity of the earnings management phenomenon in the firms of four European countries. More specifically, a multiple regression analysis (panel data) is used to investigate firm-level, industry level, and cross-country differences due to different institutional and legal frameworks with respect to corporate governance. Employing a sample of United Kingdom (UK), German, French, and Italian firms for the period 2010–2019 we estimate the intensity of the earnings management phenomenon using, as a proxy, the magnitude of discretionary accruals. Two models were adopted to analyze the data, namely the modified Jones model (Dechow et al., 1995) and the model of Dechow and Dichev (2002) (DD), as modified by McNichols (2002). Our results indicate that Italian firms exhibit a greater degree of earnings management, followed by German, French, and UK firms. In particular, code law countries manipulate their earnings to a greater extent compared to common law countries (Jiang et al., 2018; Balios et al., 2020). Additionally, our empirical findings suggest that the phenomenon is more intense in competitive industry environments (Datta et al., 2013; Markarian & Santalo, 2014). Sensitivity tests indicate that both firm-specific characteristics and the regulatory framework of each country should be taken into account when assessing the earnings management phenomenon.

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Bank earnings management using loan loss provisions: comparing the UK, France, South Africa and Egypt

Cited by 4 publications

References 43 publications

Implikasi Penerapan Ifrs 9 Pada Daya Prediksi CKPN Terhadap Kerugian Kredit Bank

Implikasi Penerapan Ifrs 9 Pada Daya Prediksi CKPN Terhadap Kerugian Kredit Bank

Bank Loan Loss Provisions Determinants in Non-Crisis Years: Evidence From African, European, and Asian Countries

The effect of industry level characteristics and cross-country differences on earnings management: A European comparative perspective

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