Corporate Governance and Earnings Management: Evidence From Listed Non-Financial Firms

Sadiq, Muhammad; Pantamee, Abdurrahman Adamu; Mohamad, Shafi; Aldeehani, Talla M.; Ady, Sri Utami

doi:10.17512/pjms.2020.22.2.30

Cited by 7 publications

(4 citation statements)

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“…The results of this study are supported by the results of research conducted by Putri & Sakir (2022); Valinarta & Handini (2022) and research conducted by Purnomo & Erawati (2019), which show that profitability has a positive and significant effect on capital structure. The results of this study are also supported by research conducted by Sadiq et al (2020), explaining that profit management that is the same as Return On Assets (ROA) can also be influenced by corporate governance. One of corporate governance is how companies manage debt.…”

Section: Discussion the Effect Of Profitability On Capital Structure ...supporting

confidence: 77%

The Capital Structure as A Mediator Between Profitability and Company Size to Company Value in Textile And Garment Sector Companies Listed on The Indonesia Stock Exchange (IDX)

Ady,

Zakina

2023

Ekspektra J. Bisnis dan Manaj.

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This study aimed to determine the effect of profitability and company size on company value with capital structure as an intervening variable in textile and garment sector companies listed on the Indonesia Stock Exchange (IDX) for 2018-2022. This research used a quantitative approach and secondary data from annual financial statements from www.idx.co.id. The population in this study was textile and garment sector companies listed on the Indonesia Stock Exchange (IDX) in the 2018-2022 period, with a population of 22 companies. Determining research samples used the purposive sampling method, and 18 companies with 90 data points were obtained as samples. Data analysis was performed using SEM-PLS version 3.0. The results of this study showed that profitability had a significant positive effect on capital structure. The size of the company had no impact on the capital structure. Profitability had a significant positive effect on the value of the company. The size of the company had no impact on the value of the company. Capital structure had a significant positive effect on the value of the company. Profitability had a significant positive impact on the value of the company with capital structure as an intervening variable; the size of the company did not affect the value of the company with capital structure as an intervening variable.

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Section: Discussion the Effect Of Profitability On Capital Structure ...supporting

confidence: 77%

The Capital Structure as A Mediator Between Profitability and Company Size to Company Value in Textile And Garment Sector Companies Listed on The Indonesia Stock Exchange (IDX)

Ady,

Zakina

2023

Ekspektra J. Bisnis dan Manaj.

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“…Razali et al (2014) focused their investigation on 227 publicly listed Malaysian enterprises to measure the probability of fraudulent financial reporting using both the Beneish M-score and Altman's Z score models. Their research shows that effective corporate governance may reduce the probability of fraudulent reporting and moderate the relationship between political influences and real earnings management (Sadiq et al, 2020). This finding is also supported by the research of Kjaerland and discretionary accruals (DA) in the logistic approach, they concluded that banks use accruals to manage financial distress, which is an effective insight for regulators, auditors, and investors.…”

Section: Theoretical Backgroundmentioning

confidence: 75%

Bonds Between Earnings Management and Corporate Financial Stability in the Context of the Competitive Ability of Enterprises

Valášková¹,

Androniceanu²,

Zvaríková³

et al. 2021

JOC

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The financial health of enterprises and their continued profitability and competitiveness in the market are influenced considerably by the level of earnings achieved. Enterprises are forced to report the best possible results to demonstrate financial strength and competitiveness and to provide a good accounting for investors and creditors. Thus, the main objective of the study is to investigate whether there is any mutual dependence between corporate financial stability and earnings management. To measure these categories, Altman’s Z score was used to determine the financial health of enterprises, and the Beneish M-score and modified Jones model were applied to detect earnings manipulation. Using the chi-square test, the results revealed a statistically significant dependence between financial distress and earnings manipulation. Then, a multivariate statistical technique of correspondence analysis was applied to the categorical data to find categories of factors that are mutually correspondent. Based on a dataset of 11,105 enterprises operating in the Visegrad countries, the results found that enterprises that are threatened by bankruptcy or located in the gray zone tend to manipulate their earnings to maintain credibility, creditworthiness, and competitiveness. Because the financial health of an enterprise provides a potential incentive for earnings manipulation, state authorities, regulators, and policy-makers may benefit from the findings of the study.

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“…Savova (2021) examined accounting standards in Bulgaria and found that the accounting system in Bulgaria complied with international IFRS standards, which reduces the scope for accounting manipulations. Sadiq et al (2020) adds that the relationship between corporate governance and profit quality is positive.…”

Section: Literature Reviewmentioning

confidence: 99%

Does the corporate life cycle affect earnings management? Evidence from Central European countries

Michalkova

2021

SHS Web Conf.

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Research background: Earnings manipulations are a global phenomenon, the aim of which is not only to improve the financial position in accordance with Positive Accounting Theory, but also other goals of the company in accordance with the management strategy. However, the diversity of the company’s goals along with the corporate life cycle are crucial factors influencing the quality of corporate earnings and the existence, scope and application of downward and upward earnings management. Purpose of the article: The aim of the paper is to comprehensively analyse and verify the existence and extent of downward and upward earnings management in Central European countries with an emphasis on differences between countries and between life cycle stages. Methods: The study uses Mann-Whitney test and binomial test to verify the existence and extent of downward and upward earnings management. The sample covers discretionary accruals for 2019 estimated by modified Jones and Teoh, et al. models from almost 3,500 companies from four Central European countries. Findings & Value added: The results show that, depending on the life cycle stage or country, companies manipulate profits, but the application of a specific type of earnings management and its scope vary significantly within countries and life cycle stages. Lifecycle manipulation earnings are U-shaped, meaning that start-ups and declining companies use, on average, more significant upward earnings management. On the contrary, mature companies reduce their accounting profit. Nevertheless, the share of companies using upward earnings management is higher than companies with downward earnings management.

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Corporate Governance and Earnings Management: Evidence From Listed Non-Financial Firms

Cited by 7 publications

References 0 publications

The Capital Structure as A Mediator Between Profitability and Company Size to Company Value in Textile And Garment Sector Companies Listed on The Indonesia Stock Exchange (IDX)

The Capital Structure as A Mediator Between Profitability and Company Size to Company Value in Textile And Garment Sector Companies Listed on The Indonesia Stock Exchange (IDX)

Bonds Between Earnings Management and Corporate Financial Stability in the Context of the Competitive Ability of Enterprises

Does the corporate life cycle affect earnings management? Evidence from Central European countries

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