Abstract
The study aims to examine the association of firms characteristics comprise of firm age, firm size, leverage, and profitability to earnings management (EM). The data is collected from listed Singaporean corporation in Singapore stock exchange (SGX) in the period of 2017 and 2018. Purposive sampling and panel data regression were employed as the sampling and analysis method, respectively. Our results are based on a large sample of 852 firm-year observations. The results show that firm age and firm size significantly affected EM, meanwhile, leverage and profitability indicate insignificant effects to EM. In addition, these results provide information to investors and potential investors regarding future investment decisions.
Highlights
The financial report is a communication tool to provide financial information for related or third parties
Leverage and profitability have no significant effect on earnings management (EM) (Table 2)
The results show that firm age and firm size that have a significant effect on EM, while leverage and profitability have no significant effect on EM
Summary
The financial report is a communication tool to provide financial information for related or third parties It describes the result of operational activities and performance carried out by the company to be reported to internal and external parties with the parameter is in the form of profit or earning (Hasty et al, 2017). Information regarding earnings is sometimes inaccurate because earnings information is often misused by management in order to fulfill their satisfaction or personal interests (Astuti et al, 2017). This is due to the tendency of those who pay attention to earnings and are recognized by management, managers whose performance is measured based on earnings information. Encouraging the emergence of an action to manage earnings or commonly known as earnings management (EM) (Savitri 2014)
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