Substitution between accruals‐based and real activities earnings management of listed Thai firms

Khunkaew, Rojana; Yang, Qin

doi:10.1002/jcaf.22406

Cited by 8 publications

(13 citation statements)

References 37 publications

(121 reference statements)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Our results suggest that the effect of culture on earnings management differs between firms in developed countries and emerging countries. Furthermore, we also demonstrate that some of the cultural dimensions proposed by Hofstede (2011) seem to exhibit a substitution effect between accruals-based and real earnings management tactics (e.g., Cohen and Zarowin, 2010;Zang, 2012), while other factors seem to reveal a complementary effect (e.g., Li et al, 2018;Khunkaew and Qingxiang, 2019;Li, 2019).…”

Section: Regression Resultssupporting

confidence: 65%

See 1 more Smart Citation

National culture and earnings management in developed and emerging countries

Viana

Lourenço

Ohlson

et al. 2021

JAEE

View full text Add to dashboard Cite

PurposeThis study investigates how the association between national culture and earnings management compares between developed and emerging countries.Design/methodology/approachThe empirical analysis relies on a sample of 6,313 firm-year observations from 11 emerging markets and 27,605 firm-year observations from 22 developed countries. The authors use ordinary least squares regression methods to test the hypotheses of the study.FindingsBased on Hofstede's (2011) cultural dimensions, the authors find that firms from countries with a higher level of uncertainty avoidance and individualism are less likely to engage in earnings management, but the effect of uncertainty avoidance (individualism) is more (less) pronounced in the emerging countries. Moreover, the authors demonstrate that firms from emerging (developed) countries with higher levels of power distance and masculinity are less (more) likely to engage in earnings management. Finally, the authors find evidence of a trade-off between accruals-based and real earnings management in firms from countries with greater long-term orientation and an indulgence cultural dimension.Originality/valueThis paper adds to the literature by theoretically discussing and empirically analysing the role that developed and emerging countries' development plays on the effect of national culture on earnings management.

show abstract

Section: Regression Resultssupporting

confidence: 65%

“…Cohen and Zarowin, 2010;Zang, 2012), while other factors seem to reveal a complementary effect (e.g. Li et al, 2018;Khunkaew and Qingxiang, 2019;Li, 2019).…”

Section: Regression Resultsmentioning

confidence: 99%

National culture and earnings management in developed and emerging countries

Viana

Lourenço

Ohlson

et al. 2021

JAEE

View full text Add to dashboard Cite

show abstract

“…Thus, their study finds evidence of both a substitutability of earnings management methods, and a complementary relationship between the two methods. In a study of Thai firms, Khunkaew and Qingxiang (2019) find evidence that firms substitute earnings management methods.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Do firms substitute earnings management methods? The case of the MENA region

Elkalla

2020

jrems

View full text Add to dashboard Cite

The purpose of this paper is to empirically test whether firms substitute accruals-based earnings management with real activities-based earnings management or complement the two methods in the MENA region. Further, this paper seeks to investigate the impact of IFRS adoption on accruals-based earnings management. To test the research hypotheses, this paper employs a panel fixed-effects regression model for a sample of 798 non-financial listed MENA region firms over the period 2008-2015, inclusively. The research findings provide evidence that firms complement accruals-based and real activities-based earnings management methods rather than substituting one earnings management method for the other, which suggests that MENA firms conduct both methods concurrently to achieve earnings targets and are not constrained by the relative costs of employing a particular method. Furthermore, a significant positive association between GDP growth and accruals-based earnings management is found, which provides evidence that economic growth leads to a greater degree of accruals-based earnings management behavior in MENA region firms.

show abstract

“…(2005) suggest REM is less likely to be questioned by auditors and is more likely to be considered normal to the operations of the firm. Khunkaew and Qingxiang (2019) reports that accruals earnings management (AEM) and real activities earnings management (REM) are used as substitution methods. Cohen et al.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Political, economic, financial uncertainty, and real earnings management

Jain

Jackson

Sakaki

2021

J Corp Accounting Finance

View full text Add to dashboard Cite

We examine the relationship between uncertainty (political, economic, and financial) on real earnings management (REM). Covering nine presidential elections in the U.S. from 1980 to 2012, we find that firms limit overproduction in pre‐election years followed by reductions in REM activities in election years. We also show that economic and financial uncertainty (FU) stimulate firms’ use of REM through cutting back discretionary expenses such as advertising, research and development, and selling, general, and administrative expenses. We also find that firms with higher agency costs reduce REM during election years whereas larger firms accelerate REM during political, economic policy, and FU.

show abstract

Substitution between accruals‐based and real activities earnings management of listed Thai firms

Cited by 8 publications

References 37 publications

National culture and earnings management in developed and emerging countries

National culture and earnings management in developed and emerging countries

Do firms substitute earnings management methods? The case of the MENA region

Political, economic, financial uncertainty, and real earnings management

Contact Info

Product

Resources

About