Real Earnings Management in the Indonesian Sharia Capital Market

Yuliana, Rita; Anshori, Muslich; Alim, M. Nizarul

doi:10.1016/j.sbspro.2015.11.114

Cited by 15 publications

(18 citation statements)

References 9 publications

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“…Group 15 is a sample group had total assets ratio of earnings per year at the beginning in the interval -0.005 to 0.000, while the group of 16 has the interval 0.000 to 0.005. Similarly, it was also found in the results of observations by Burgstahler & Dichev (1997), Roychowdhury (2006), Gunny (2010), Aflatooni & Mokaromi (2013), Chen, Lin & Weng (2013), and Yuliana, Alim & Anshori (2015).…”

Section: Data Analysis and Discussionsupporting

confidence: 72%

The Islamic Capital Market Response to the Real Earnings Management

Yuliana

Alim

2017

JEBAV

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A B S T R A C T This study aims to prove the effect of the company's status, i.e. membership on the Islamic capital market and the status as suspect firm, as a determinant of real earnings management (REM). A B S T R A K Penelitian ini bertujuan untuk membuktikan pengaruh status perusahaan, yaitu keanggotaan di pasar modal syariah dan status sebagai perusahaan yang diduga melakukan manajemen laba riil (MLR). MLR dilakukan melalui peningkatan penju

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Section: Data Analysis and Discussionsupporting

confidence: 72%

The Islamic Capital Market Response to the Real Earnings Management

Yuliana

Alim

2017

JEBAV

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“…Subsequently, 300 firms with the lowest average ROA for the years 2013, 2014 and 2015 were chosen. Firms with around zero earnings are more likely to engage in EM (Mohd Saleh et al, 2005;Roychowdhury, 2006;Yuliana et al, 2015). This argument is in line with previous studies that selected firms with ROA between zero and 0.005 in detecting EM (Roychowdhury, 2006;Yuliana et al, 2015).…”

Section: Methodssupporting

confidence: 71%

“…This study covers 300 Malaysian listed firms. The selection of these firms is based on the firms' performance using return on assets (ROA) (Burgstahler & Dichev, 1997;Roychowdhury, 2006;Yuliana, Anshori, & Alim, 2015). By following previous studies (Al-Absy, Ku Ismail, & Chandren, 2017, 2018a, 2018b, 2019a, 2019b, this study used the following two steps.…”

Section: Methodsmentioning

confidence: 99%

Corporate Governance Mechanisms, Whistle-Blowing Policy and Real Earnings Management

Al-Absy

Ismail²,

Chandren³

2019

IJFR

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The purpose of this study is to investigate whether the mechanisms of corporate governance (CG) in firms that have a policy of whistle-blowing (WBP) are more effective in mitigating real earnings management (REM) than those without WBP. To achieve this objective, the sample of the study, 288 Malaysian firms for the years 2013 to 2015, have been grouped into firms with and without WBP. In addition, the Roychowdhury Models were used to determine the abnormal levels of the REM. The results show that most of the CG mechanisms, i.e., audit committee (AC) size, AC meetings, AC independence and auditor size in firms with WBP are found to be significantly associated with low level of REM which supporting agency and resource dependence theories. However, only board independence and ownership concentration are found to be significantly associated with high level of REM. Regarding firms without WBP, most of the CG mechanisms, i.e., AC size, women in the AC, AC accenting expertise and ownership concentration, are found to be significantly associated with high level of REM. However, only board meetings, AC multiple directorships and auditor size are found to be significantly associated with low level of REM. The finding of this study suggests that having WBP in a firm could improve the monitoring role of the CG mechanisms towards mitigating REM. However, strengthening the role of WBP is still necessary to improve the efficiency of the monitoring role of CG mechanisms. Hence, there is a need for more policy and law that could encourage whistle-blowers to disclose any misconducts in firms and at the same time, prevent management from undermining the effectiveness of the whistle-blowing policy. The findings of this study will enrich the body of literature where there is no previous study has been done in respect of REM.

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“…This is because EM is high in firms with close to zero earnings because management wants to avoid small losses by converting them into a small profit. In this regard, the firms are called suspect firms (Yuliana, Anshori, & Alim, 2015). Thus, this study followed two steps to get a slightly positive ROA.…”

Section: Methodsmentioning

confidence: 99%

Board Chairmen’s Involvement in the Nomination and Remuneration Committees and Earnings Management

Al-Absy¹,

Ismail²,

Chandren³

2018

AABFJ

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A board chairman is a very influential figure in a firm which may be dominated by an insider director, who, in some cases, is a family member. Consequently, the board chairmen (BC) may play a vital role in the firm's output, especially when they sit on the board committees. Therefore, the current study aims to examine the influence of the BC who are also: the chairmen of the nomination committee (BCNDUAL); ordinary members of the nomination committee (BCNMEM); the chairmen of the remuneration committee (BCRDUAL); and ordinary members of the remuneration committee (BCRMEM), on the level of accrual earnings management (AEM) and real earnings management (REM). This study also tests the overall influence of the BC's involvement in the nomination committee (BCNINV) by combining the terms of BCNDUAL and BCNMEM into BCNINV and the overall influence of BC's involvement in the remuneration committee (BCRINV) by combining the terms of BCRDUAL and BCRMEM into BCRINV, on the level of AEM and REM. This study selected 300 firms listed on the Bursa Malaysia Main Market with the lowest positive performance (based on return on assets (ROA)) for the years 2013 to 2015. The random-effects feasible generalized least squares (FGLS) regression shows that BCNDUAL, BCNMEM and BCNINV have a significant positive relationship with AEM and REM. However, BCRDUAL and BCRINV have a significant negative relationship with AEM but not with REM. This study aims to alert policy makers, firms and their stakeholders, as well as researchers of the need to strengthen their board committees' effectiveness (especially the nomination committee), and to make them more independent.

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Real Earnings Management in the Indonesian Sharia Capital Market

Cited by 15 publications

References 9 publications

The Islamic Capital Market Response to the Real Earnings Management

The Islamic Capital Market Response to the Real Earnings Management

Corporate Governance Mechanisms, Whistle-Blowing Policy and Real Earnings Management

Board Chairmen’s Involvement in the Nomination and Remuneration Committees and Earnings Management

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