Earnings Management and Financial Reporting Fraud: Can External Auditors Spot the Difference?

Kassem, Rasha

doi:10.11634/21679606170646

Cited by 17 publications

(24 citation statements)

References 17 publications

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“…They continue to argue that among other reasons, which motivate managers to manipulate the company's earning is the use of accounting data toward monitoring and regulating the contract between the firms and stakeholders. Additionally, managers are opportunistically managing the real earnings to achieve their personal interest (Gul, Chen & Tsui, 2003;Kassem, 2012;Rahman, Moniruzzaman, & Sharif, 2013) and maintaining status of their stock process in the capital market (Rahman, et, al., 2013). This study is primarily conducted to examine the effect of board size, board composition and dividend policy on the real earning management in the Jordanian listed industries.…”

mentioning

confidence: 99%

Effects of Board Size, Board Composition and Dividend Policy on Real Earnings Management in the Jordanian Listed Industrial Firms

Shahwan¹,

Almubaydeen²

2020

IJFR

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Earning manipulation has been a normal transaction among the global businesses, in which business organization sees it as beneficial, thereby turning black eyes to its negative impact on the general economy. This study aimed at examining the impact of board size, Board composition and dividend policy on real earnings management in the listed Jordanian industries. 8 years data (2010 to 2018) was extracted from the audited financial reports of the selected firms. Data was analyzed using Structural Model via AMOS version 26 and SPSS version 21. The findings revealed a positive and significant effect between board size, board composition and real earning management at p-value<0.05 and 0.001 (two-tailed) respectively. While negative of dividend policy on REM was recorded at p-value>0.05 (two-tailed). This study has immensely contributed towards bridging the gap in the existing knowledge as it documented a new finding. The benefits of these findings cross over the managers, shareholders, board of directors, investors, the Jordanian government and all other relevant institute for the buildup of the healthiest industrial sector and better economy.

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confidence: 99%

Effects of Board Size, Board Composition and Dividend Policy on Real Earnings Management in the Jordanian Listed Industrial Firms

Shahwan¹,

Almubaydeen²

2020

IJFR

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“…A similar research on tax reporting issues was done by (Kassem, 2012), who reported that there is a significant association between tax reporting and the investors' decision. He also argued that high levels of aggressive tax reporting could lead to accounting manipulation.…”

Section: Issues Of the Studymentioning

confidence: 62%

The Red Flags of Tax Reporting on the Market Value

Rashid¹,

Noor²,

Matsuski³

et al. 2014

IBR

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The aim of this paper is to provide empirical evidence of the red flags in the level of tax reporting among the Shariah Compliance companies in Bursa Malaysia. The convenience sampling method was employed among 123 Shariah compliance companies of Bursa Malaysia. Meanwhile, the investigation period in this study had covered twelve years of continuous data, starting from the year 2001 until the year 2012. This study adopted the Current Based Model to calculate the level of Effective Tax Rate (ETR) as an independent variable while the firm values as dependent variable. It was revealed that due to the Creative Accounting strategies, there is a possibility of tax fraud occurring during the calculation of taxation level. These activities, which were applied in implementing tax planning mechanisms is however allowed by the GAAP under MFRS. As is commonly known, the purpose of tax reporting is to safeguard the interest of potential shareholders; however, these practices of aggressive tax planning strategies will result in differing perceptions from tax payers' and potential shareholders' perspectives. Therefore, aggressive tax planning strategies could be a red flag to financial fraud activities. Thus, this study would disclose some evidence on how financial fraud could be revealed from tax reporting strategies.

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“…And not using a measurement were made to further investigate the link between the governance and the creative accounting. Kassem (2012) efforts to supply a uniqueness between fraud and creative accounting and reoffered to as an earnings management. Fraud is a material false statement whose target is to deceive and persuade reliance on the false statement by the victim.…”

Section: Literature Reviewmentioning

confidence: 99%

The Impact of Audit Committee Characteristics on the Creative Accounting Practices Reduction in Jordanian Commercial Banks

Saleem¹

2019

MAS

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This study aimed at determining the impact of the characteristics of the Audit Committee (The effect of Activity of the Audit Committee, the size of the Audit Committee, and Independence of the Audit Committee) in reducing creative accounting practicesin Jordanian commercial banks.The study population is composed of all Jordanian banks listed on the Amman Stock Exchange (16), during the period from 2011 to 2017. The study sample is represented by all Jordanian commercial banks. The current study is based on panel data since the data combine one-time and cross-section data for a period of time. The data was composed of a set of indicators for 13 Jordanian commercial banks for the period from 2011 to 2017, and data have been collected from the banks' annual reports. The adoption of the study on the analysis of time-series data comes from the increase in degrees of freedom. The results of the hypothesis test indicate that there is a significant effect of Audit Committee characteristics on the reduction of creative accounting practices in Jordanian banks at a level of significance of 0.05 except for variable (size of the Audit Committee).

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Earnings Management and Financial Reporting Fraud: Can External Auditors Spot the Difference?

Cited by 17 publications

References 17 publications

Effects of Board Size, Board Composition and Dividend Policy on Real Earnings Management in the Jordanian Listed Industrial Firms

Effects of Board Size, Board Composition and Dividend Policy on Real Earnings Management in the Jordanian Listed Industrial Firms

The Red Flags of Tax Reporting on the Market Value

The Impact of Audit Committee Characteristics on the Creative Accounting Practices Reduction in Jordanian Commercial Banks

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