How does the real earnings management affect firms innovative? Evidence from US firms

Abstract

Purpose The purpose of this paper is to examine the effect of R&D intensity on the real earnings management index. Design/methodology/approach The authors proceed with dividing the full sample into two sub-samples, in accordance with the R&D associated intensity median. The final test sample proves to involve 73 firms along with 949 relating observations, while the control sample appears to enclose 65 firms and 845 relevant observations for the period 2000-2012. Findings The main finding of this study is the great influence of R&D intensity on the real earnings management index on the test sample. Accordingly, the proposed hypothesis stipulating that the innovative firms engage in upward real earnings management turns out to be strongly supported. Research limitations/implications The study was conducted using robust methods to test the effect of R&D intensity on the real earnings management index. The generalized least squares method was used to fit panel data and overcome heteroscedasticity and autocorrelation problems. The aim of the study was to prove the great effect of R&D intensity on the real earnings management index. As this study was based on data from American companies, the results cannot be generalized to all contexts. Originality/value This paper differs from previous work and tests the effect of innovative firms, the market-to-book ratio on real earnings management. The findings of this study will enrich the literature on real earnings management by suggesting R&D intensity that can significantly enhance the real earnings management index. Therefore, these findings will be helpful to investors, managers and regulators because they have implications for the interactive decision-making process.

Model Teori Fraud Diamond mempengaruhi Financial Statement Fraud dimoderasi oleh Innovation Strategy

“…Namun menurut penelitian Chouaibi et al (2019) dan Salehi et al (2018), mereka memberikan penjelasan bahwa perusahaan yang inovatif sulit untuk dikelola. Hal ini dikarenakan oleh kekhususan dalam pencatatan aset mereka, terutama dalam konteks manipulasi laba akuntansi.…”

“…Hubungan khusus terbukti bertahan antara prinsipiel dan agen yang ditandai dengan prevalensi kepentingan antara kedua belah pihak (Chouaibi et al, 2019). Namun, konflik kepentingan dalam hubungan keagenan dapat muncul dikarenakan perbedaan tujuan yang ingin dicapai serta preferensi risiko masing-masing.…”

“…Ini bermaksud untuk menampilkan harga pokok penjualan yang rendah. Sehingga pengelolaan pendapatan dapat disesuaikan dengan tren yang berorientasi ke atas (Chouaibi et al, 2019).…”

“…Innovation strategy mendorong terjadinya fraud. Strategi ini dijelaskan sebagai penekanan relatif perusahaan pada berbagai jenis inovasi dan pola terkait alokasi sumber daya, sejalan dengan strateginya di tingkat perusahaan, unit bisnis, dan fungsional (Chouaibi et al, 2019;Varadarajan, 2018). Namun inovasi ini memiliki peluang lebih tinggi untuk gagal juga (Qiu & Yu, 2020).…”

“…Hal ini dilakukan supaya laba yang nanti terlapor dalam laporan keuangan mencapai target dan manajer dapat mendapatkan atau meningkatkan kompensasi beserta bonus yang kemungkinan besar akan diberikan kepadanya (Chouaibi et al, 2019;Salehi et al, 2018).…”