Earnings Management in Saudi Nonfinancial Listed Companies

Shetwi, Mohammed Al

doi:10.30845/ijbss.v11n1a3

Cited by 3 publications

(2 citation statements)

References 17 publications

(41 reference statements)

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“…Macro-economic -specific variables have statistically significant impacts on earnings management metric. Hypotheses 1, 2 will be tested by model (4) ALL= α+ βX1LLA i, t/TL-1+ βX2 ΔNPL i, t+ βX3 LCO +ε (1)…”

Section: Research Hypothesismentioning

confidence: 99%

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Do Banks in Saudi Arabia Manage Earning Using Discretionary Components?

Oraby

2023

ijmst

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This study aimed to examine whether banks in Saudi Arabia used discretionary components for loan and investment portfolios in managing earnings as this study was conducted on all banks registered on Saudi Arabia Stock Market (TASI) for the period 2013-2022. The study also aimed to determine the impact of the discretionary component of the allocations for loan losses on both profitability metrics and market metrics. To achieve objectives of the study, two metrics were used as proxies for managing earnings. The first metric used both the discretionary components of the allocations for loan losses and the realized gains and losses of investment portfolio. The second metric used only the discretionary component of the allocations for loan losses of the credit portfolio. The study relied on the quantitative approach as the study used regression models and correlations to test the study’s hypotheses. The results of the first metric of earnings management indicated that the determinants of earnings management were financial leverage, total assets, net operating profit, GDP growth rate, while the capital adequacy ratio was not one of the determinants of earnings management. The results of the second metric of earnings management indicated that the discretionary component of the allocations for loan losses had positive impacts on return on assets, return on equity, earnings per share, share price and annual share returns. That is, investors realized that the allocations for loan losses contained a discretionary component that will be converted into future earnings and cash flows, and investors look at the discretionary component positively. According to the signal theory, Saudi banks used the allocations for loan losses to transmit positive signals about the levels of the profits in the future. The results of this study have significant implications on the decisions of investors, supervisory authorities, bank managers and external auditors.

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Section: Research Hypothesismentioning

confidence: 99%

“…Earnings management metric from Model (3) will be a dependent variable in Model (4) Determinants of earning management were bank specific variables and macroeconomic specific variables as follows:…”

Section: Ta=natural Logarithm Of Total Assetsmentioning

confidence: 99%

Do Banks in Saudi Arabia Manage Earning Using Discretionary Components?

Oraby

2023

ijmst

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Integrating Non-financial Data into a Creative Accounting Detection Model: A Study in the Saudi Arabian Context

Bineid,

Khanina,

Beloff

et al. 2024

Lecture Notes in Business Information Processing

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Impact of auditor characteristics on audit quality during COVID-19: Evidence from Saudi Arabia

Shalhoob

2024

Problems and Perspectives in Management

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This study aimed to analyze the impact of auditor characteristics on audit quality in Saudi Arabia during the COVID-19 pandemic by assessing how auditor characteristics (such as gender, age, education level, professional certificate, sector, size of the employees, revenue, experience, and region) impact audit quality in crisis conditions. It employed a descriptive-analytical approach and quantitative regression analysis of cross-sectional data. The survey was conducted in 2021 among 203 auditors in Saudi Arabia. Data collection was facilitated through the assistance of the Saudi Organization for Chartered and Professional Accountants (SOCPA) to make the sample more structured and representative. The results reveal that auditor characteristics played a significant role in determining audit quality during the pandemic. Gender, education level, audit firm size, and professionalism experience showed a strong correlation (r = 0.619) between professional experience and adaptability to remote auditing conditions. The regression analysis indicates a positive impact on audit performance. The results suggest practical implications for improving auditor selection, training programs, and regulatory frameworks to enhance audit resilience in times of crisis. It offers theoretical contribution by validating existing models under pandemic conditions and providing insights for the future of auditing practices. It also assists in establishing confidence in financial reporting together with control, making investors feel secure, and maintaining stability in the business world.

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Earnings Management in Saudi Nonfinancial Listed Companies

Cited by 3 publications

References 17 publications

Do Banks in Saudi Arabia Manage Earning Using Discretionary Components?

Do Banks in Saudi Arabia Manage Earning Using Discretionary Components?

Integrating Non-financial Data into a Creative Accounting Detection Model: A Study in the Saudi Arabian Context

Impact of auditor characteristics on audit quality during COVID-19: Evidence from Saudi Arabia

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