Changes In Earnings Research Articles

Earnings management and CSR report tone: Evidence from China

AbstractThis study explores whether and how the management manipulates the tone of CSR reports to greenwash earnings management. Using the dataset of Chinese A‐share companies that published CSR reports over period 2007–2017, we discover that corporates with higher abnormal discretionary accruals and those with zero or slightly positive earnings changes are likely to release CSR reports with a more optimistic tone. Additional analyses show that this greenwash behavior is stronger when the management manages earnings upward than downward. Furthermore, the supplementary association between CSR report tone and earnings management is reduced in firms with assured CSR reports, lower financing demands and equity issue, higher accounting conservatism, as well as a better information disclosure environment, whereas the relationship is not correlated with the manner of the reporting disclosure. This study reveals that managers strategically employ CSR report tone to hide earnings management and shape stakeholders' expectations, and provides insights into both qualitative and quantitative disclosure literature.

IT skills, occupation specificity and job separations

This paper examines how workers' earnings change after involuntary job separations depending on the workers' acquired IT skills and the specificity of their occupational training. We categorize workers' occupational skill bundles along two independent dimensions. First, we distinguish between skill bundles that are more specific or less specific compared to the skill bundles needed in the overall labor market. Second, as digitalization becomes ever more important, we distinguish between skill bundles that contain two different types of IT skills, generic- or expert ones. We expect that after involuntary separations, these IT skills can have opposing effects, either reducing or amplifying earnings losses of workers with specific skill bundles. We find clearly opposing results for these two types of IT skills for workers in specific - but not in general - occupations: Having more generic IT skills is positively correlated with earnings after involuntary separations, whereas more expert IT skills are negatively correlated.

Banking Corporation Dividend Policy – Evidence from ASEAN-6 Countries

Purpose : The study aims to investigate the effect of Return on Assets (ROA), Asset Turnover (Ast-Tvr), Leverage, Change in Earnings (ChE), and Size on dividend policy as measured by Dividend Increase (DIC) on banking companies in Asean-6 Countries.
 Method : We employed eight-year observation period from 2012 to 2019, thus the purposive method obtained 134 companies as samples. This study used regression analysis by Logistic Regression as the method and collected the secondary data from the annual financial statements of banking companies of ASEAN-6 countries which comprises of Indonesia, the Philippines, Singapore, Malaysia, Thailand, and Vietnam.
 Findings : The results show that ROA, Ast-Tvr, Leverage, ChE, and Size have no significant effect on dividend policy.
 Novelty : To the best of our knowledge, there is no literature examining dividend policy in ASEAN-6 countries. Hence, we tried to fill the gap in terms of dividend policies in ASEAN-6 Countries. Further, this study contributes further research to provide evidence of what policies are set by banking corporations in ASEAN countries. This research also displays a better understanding for stakeholders and investors in interpreting the dividend related information prior taking the investment decision.
 Keywords : Dividend Policy; ROA; Asset Turnover; Leverage; Change in Earnings; ASEAN-6 Countries

Daily labor mobility and the timing of entry into motherhood

The influence of female employment on fertility has been widely studied. However, there is a gap in the knowledge of the effect of daily labor mobility on fertility. The paper presents the study of the direct and indirect effects of commuting on the timing of entry into motherhood by comparison the age‐specific first‐birth rates of female commuters and non‐commuters. The effects appear in simultaneous decision making on childbearing and com‐ muting, and effects of cross‐municipal flows of population and earnings, and fertility norms diffusion on childbearing. Estimation strategy addresses the problem of potential endogeneity of commuting decision. The study uses individual register data from Sweden for women born in 1974 and residing in the Stockholm area following them from 19 to 32 years old. Results demonstrate that commuting women postpone their first birth. Commuters’ first‐birth rates are more sensitive to the changes in relative earnings, fertility norms, and the proportion of commuters in the residing population. Swedish family and labor policies significantly improve reconciliation of family and working life in comparison with many European countries. However, the study demonstrates that the policies do not address commuting costs (in a general meaning) in childbearing decision. The results can be used to explain the link between fertility and daily labor mobility in high‐income countries with a high proportion of women involved in daily labor mobility.

Accounting Information and Value Relevance Nexus: Evidence from Pakistan

This study aims at studying the value relevance of accounting information produced by large companies in Pakistan as there is a dearth of research in linking the returns on securities with accounting information produced by the companies in the Pakistan economy. For this purpose, the data was collected from 170 companies in the non-financial sector for 11 years (2006-2016). Panel data settings were used to regress the accounting information i.e., Earnings with Returns which are calculated using the Returns model. Empirical results prove that Earning figures are consistently value relevant throughout the period but the increase in value relevance of earnings is not significant. It is also shown that investors in Pakistan are giving more importance to Changes in Earnings over a sample period than to Earnings. This study is likely to highlight the importance of accounting information to investors in making their investment decisions.

IFRS Convergence and Value Relevance of Indian Accounting Information: The Earnings-Returns Association Analysis

Manuscript type: Research paper Research aims: India has recently joined the accounting revolution by implementing the International Financial Reporting Standards (IFRS) through the convergence mode. This paper aims to examine the value relevance of Indian accounting information by finding an association between stock returns and the levels of earnings and changes in earnings. Design/Methodology/Approach: The study follows both relative and incremental association approaches to investigate changes in the value relevance of accounting information prepared using the IFRS converged Indian Accounting Standards (Ind-AS), while also examining the impact of their voluntary use. The study employs the Easton and Harris (1991) model on accounting data collected from 2012-13 to 2019-20. The panel data of 7,064 firm-year observations covers 883 firms listed on the National Stock Exchange (NSE) and uses relevant econometric tests and multivariate panel regressions to test the hypotheses. Research findings: The findings reveal a decline in the returns value relevance following both mandatory and voluntary IFRS convergence. Theoretical contribution/Originality: The study is the first to document the changes in value relevance based on stock returns since the IFRS convergence process began in India. Practitioner/Policy implication: This line of research is significant in Indian capital markets to unravel the effects of the new standards on accounting as well as stock market variables. It has managerial implications for firm and standard-setters. Research limitation: The value relevance results are based on the returns model alone and the study does not analyse the price model.

Faktor-Faktor Yang Mempengaruhi Perubahan Laba Pada PT. Wijaya Karya Bangunan Gedung Tbk. Yang Terdaftar Di Bursa Efek Indonesia

Competition in the business world, which is getting tighter and tighter so fast, has a huge impact on the development of the current capital market, especially in the business activities of large and small industries. This study aims to determine the effect of Current Ratio (CR), Debt to Equity Ratio (DER), Return On Assets (ROA), and Total Asset Turn Over (TATO) on changes in profits at PT. Wijaya Karya Gedung Tbk. Methods of data used is secondary data. The data analysis technique used in this study was multipke linear regression analysis using the SPSS version 24 statistical calculator. The results showed that the current ratio has positive effect on changes in earnings. Meanwhile, Debt to equity ratio (DER), Return on assets (ROA) and Total asset turnover (TATO) have no significant effect on changes in earnings.The coefficient of determination R Square is 0,816 indicating that changes in PT. Wijaya Karya Gedung, Tbk is determined by the current ratio, debt to equity ratio, return on assets, and total asset turnover of 81,6%, while the remaining 18,4% is determined by other factors outside the independent variabes in this study.

Longitudinal Assessment of Labor Market Earnings Among Patients Diagnosed With Cancer in Canada

To our knowledge, there have been no studies that estimated the short-, mid-, and long-term effects on cancer survivors' labor market earnings using administrative data. To estimate the change in labor market earnings due to cancer diagnosis stratified by cancer type and age category. This population-based cohort study used a retrospective analysis of Statistics Canada's administrative linkage file, which includes microdata from the 1991 Census, the Canadian Cancer Registry, mortality records, and personal income tax files. Participants included patients newly diagnosed with cancer from 1992 to 2008. All statistical analyses were finished on September 30, 2020. Cancer diagnosis using the International Classification of Diseases, Ninth Revision, and the International Classification of Diseases, Tenth Revision. Annual and percent change in labor market earnings. The empirical strategy used a combination of the Mahalanobis distance and propensity score matching method and the difference-in-difference regression method to select a control group similar to the cancer survivors in this study and assess the association of the cancer diagnosis with labor market earnings, respectively. A total of 59 532 patients with cancer and 243 446 patients without cancer were included in the main analysis. The mean (SD) age was similar between the matched treatment and control cohort (49.70 [8.1] years vs 49.68 [7.2] years), as was the proportion of females (0.49 vs 0.49), and the individual reported income ($37 937 [$18 645] vs $37 396 [$16 876]). The results showed the negative associations of cancer with labor market earnings. Additionally, the severity of the cancer was associated with labor market earnings, where cancer survivors with a severe type of cancer in terms of the 5-year survival rate are shown to have a larger and more persistent earnings difference compared with the control group. The findings of this cohort study suggest that labor market earnings losses are associated with a cancer diagnosis. A better understanding of the loss of labor market earnings following cancer diagnosis and by cancer type can play an important role in starting a dialogue in future policy initiatives to mitigate the financial burden faced by cancer survivors.

Benchmark Beating and Earnings Manipulation in Nigerian Firms

Earnings management among firms remains a central focus for academics, auditors and regulatory bodies. Benchmark-motivated earnings management occurs when managers engage in opportunistic activities, including flexible use of accounting standards to misrepresent the information in a firm’s financial reports. Academic research has focused on how firms manage earnings to beat benchmarks, but the evidence regarding firms in emerging African stock markets is scarce and none is available for Nigeria. We applied both accruals quality and discretionary accruals models to detect whether firms that beat earnings benchmarks report earnings differently from others. Using 161 firms listed on the Nigerian Stock Exchange from 2002 to 2019, the study verifies how benchmark beaters manage earnings under the framework of two earnings thresholds – earnings (level) and positive earnings changes. Earnings persistence tests were carried out to verify whether benchmark beaters are consistent manipulators relative to non-beaters. The findings indicate that positive earnings benchmarks differ among the dichotomized groups. The evidence is not sufficient to validate that the change in earnings benchmarks motivates earnings discretions. However, the evidence may improve for larger samples. The study offers insights for informed decisions on the expectation of investment returns for investors, creditors, and other market partakers that require earnings information.

Revisiting mean reversion in profitability and earnings: evidence from India (2007–2020)

PurposeThe purpose of this article is to revisit the mean reversion in profitability and earnings among Indian-listed firms, based on the idea that changes in profitability and earnings are somewhat predictable.Design/methodology/approachThe study used a sample of 445 Bombay Stock Exchange (BSE)-listed companies and 309 companies from the manufacturing sector in India for the period from 2007 to 2020. The study employed cross-sectional regressions. Both linear and non-linear Partial Adjustment Models (PAM) were used to forecast profitability and earnings.FindingsThe study revealed that profitability and earnings mean revert for both the BSE-listed companies and the manufacturing sector companies from 2007 to 2012. However, for the years from 2013 to 2020, it was found that there is no significant evidence of mean reversion in both the BSE-listed companies or the manufacturing sector companies.Practical implicationsThe findings have larger implications for security analysts who forecast future stabilisation or recovery of historically high or low growth rates. Investors and analysts would benefit from having a better understanding of how competitive attacks affect profitability as well as how the overall economic growth of a country affects earnings and valuations.Originality/valueMost of the empirical research in India has focused on mean reversion in stock prices or stock returns. The present study looked at the mean reversion of profitability and earnings in Indian firms.

Apprehensions and Optimism among Dental Professionals during the COVID-19 Pandemic-A Nationwide Cross-Sectional Evaluation.

Globally, the pandemic of the coronavirus disease, which started in Wuhan, China, has become a major issue for public health. The COVID-19 epidemic notably causes health professionals to experience significantly more emotional stress than the general populace. The present study proposes to investigate the fear aspect in dentists in the initiation of clinical practice during these times. An online cross-sectional study was conducted among dental practitioners based on a pre-validated questionnaire. The data were expressed as frequency and percentage analyzed using the chi-square test using SPSS version 25. The data was obtained from 271 participants, where clinical practice after the first wave was mostly by freelancers (p-value = 0.01); most of whom were married (p-value = 0.065); 19.1% attached to institutes did not have changes in earnings; 28.1% of private practitioners had less than 10% reduction in cases. A total of 62% of private practitioners are concerned about the vaccine's preventative effects (p-value = 0.026), and 57% of private practitioners worry about being sued for the delay in treatment (p-value = 0.036). Only 33.1% of employees in institutions worry that becoming sick could endanger their family. As dentists continue to work their way through this pandemic, these pressures only occasionally have an impact on them. According to the researchers, this is the first study that has captured the anxiety and apprehensions that dental practitioners experienced during the height of the COVID-19 outbreak in India in April 2021. The study's findings demonstrate that the study population was generally upbeat and confident that they could quickly overcome their fear.

Food Insecurity Transitions and Changes in Employment and Earnings

Many low-income U.S. households experience food security changes over time, but little is known about how labor market transitions contribute to these changes. This paper uses longitudinal survey data collected from 2017 to 2020 to explore how changes in employment and earnings are associated with changes in food security status. Analyses were conducted in the spring of 2022 and include nearly 3,500 individuals who participated in the Supplemental Nutrition Assistance Program Employment and Training program. Individuals responded to surveys at 2 points in time-12 months and 36 months after study enrollment-which asked for employment, earnings, and food security information. Logistic regression models were used to estimate the associations between food security transitions and employment and earnings changes. Analyses also were conducted to assess whether these associations differed on the basis of individuals' previous employment and earnings volatility. Individuals who experienced a job loss 2 months before the second survey interview had higher odds of becoming food insecure (OR=2.67; 95% CI=1.24, 5.75); those who experienced an earnings reduction in the month before the interview also had higher odds of becoming food insecure (OR=1.89; 95% CI=1.03, 3.47). The association between experiencing a job loss and becoming food insecure was greater among those who had experienced past earnings changes. There were no statistically significant associations between changes in earnings and employment and the likelihood of becoming food secure. Employment losses and earnings reductions are associated with becoming food insecure among Supplemental Nutrition Assistance Program Employment and Training participants. Providing additional support to individuals who experience these losses and reductions may reduce their risk of becoming food insecure.

FAKTOR – FAKTOR YANG MEMPENGARUHI RASIO PERUBAHAN LABA PADA PT. INDOFOOD SUKSES MAKMUR TBK.

In this study found a problem, namely Asset Value, Debt Value and Profit Value at PT. Indofood Sukses Makmur Tbk. experiencing fluctuations. This study aims to determine the effect of Current Ratio, Debt to Equity Ratio, and Return On Assets to changes in earnings and the purpose to determine the effect of Current Ratio, Debt to Equity Ratio, and Return On Assets to changes in earnings. a list of tables in the form of financial statements containing the Statement of Net Profit, Gross Profit, Net Sales, Total Equity, Total Liabilities and Total Assets. The population is 20 years and the sample is 15 years. The object of this research is located at PT. Indofood Sukses Makmur, Tbk with its address at Sudirman Plaza, Indofood Tower, 21st Floor. The data collection techniques in this research are library and documentation studies. This data analysis was carried out with the help of the SPSS program, namely by performing multiple linear regression analysis through the requirements test, namely passing the classical assumption test consisting of normality test, multicollinearity test, heteroscedasticity test, autocorrelation test and hypothesis testing. Current Ratio (CR) has no significant effect on Changes in Profit. Return On Assets (ROA) has no significant effect on changes in profit. Debt to equity ratio (DER) has no significant effect on changes in earnings. and Current Ratio (CR), Return On Assets (ROA) and Debt to Equity Ratio (DER) have a simultaneous effect on Changes in Profit for Investors, the results of this study are expected to provide useful data in pursuing business choices. It is also believed that in making decisions not only depend on information related to the ratios contained in the study, but it is necessary to pay attention to other factors and ratios in relation to Profit Changes. For the company, it is expected to pay more attention to the company's ability to generate profits. For further researchers, it is expected to increase the variables and wider observations.

An alternative approach to detect earnings management to meet or beat benchmarks

PurposeThe authors propose an alternative robust technique to test for discontinuities in distributions and provide consistent evidence of discontinuities around zero for both scaled and unscaled earnings levels and changes. The advantage of the proposed test is that it does not rely on arbitrary choice of bin width choices.Design/methodology/approachTo evaluate the power of the test, the authors examine the density function of non-discretionary earnings and detect no evidence of discontinuities around zero in levels and changes of these non-discretionary earnings. As robustness, the authors use pre-managed earnings excluding accrual and real manipulation and find similar evidence.FindingsThe finding using our technique support the Burgstahler and Dichev (1997) interpretation on earnings management, even for smaller sample sizes and reject the theory that discontinuities arise from scaling and sampling methods.Originality/valueThe study provides an overview of those studies that support and those that oppose using “testing for discontinuities” as a way to examine earnings management. The authors advance the literature by providing an alternative methodology supporting the view that the kink in the distribution represents earnings management.

Breaking the Links: Natural Resource Booms and Intergenerational Mobility

Abstract The paper demonstrates that a large economic sock such as an oil boom increases intergenerational earnings mobility among directly affected men, mostly through increased bottom-up mobility, but not for women. Preexisting local differences in mobility or shifts in the earnings distributions do not drive these findings. Instead, changes in relative earnings paid to workers with different skills offer the best explanation. Moreover, we document that intergenerational mobility is significantly higher for the indirectly affected thirdgeneration and that the oil boom broke the earnings link between first- and third-generation men.

Relevance of Earnings Value, Book Value, and Operating Cash Flow in Manufacturing Companies in Indonesia

Research aims: This study examines the value relevance of accounting information consisting of earnings information, book values, and operating cash flows after Indonesia uses the full convergence of IFRS Financial Accounting Standards.Design/Methodology/Approach: The value relevance test was conducted using Ohlson's (1995) pricing model and Easton and Harris' (1991) return model. The valuation model test employed two regression equations, i.e., testing the relationship between earnings information and book value with stock prices and then testing the relationship between earnings information, book value, and cash flow with stock prices. In addition, the return model testing was performed to examine the relationship between earnings information and earnings changes with stock returns and the relationship between cash flow and cash flow changes with stock returns. The research sample was 105 manufacturing companies, with a research period from 2016 to 2019.Research findings: The test results with the pricing model approach revealed that earnings and cash flow had value relevance, while book value had no value relevance. This study’s results suggest that earnings and cash flow information are helpful for investors in making investment decisions. Moreover, the test results with the return model approach also uncovered those earnings, changes in earnings, and changes in operating cash flows had value relevance while operating cash flows, on the other hand, had no value relevance.Theoretical contribution/Originality: The utilized two models complement each other, and this study provides empirical evidence for standard setters who can renew beliefs about how much accounting information is reflected in stock prices in Indonesia, especially the manufacturing sector, after the full convergence of IFRS Financial Accounting Standards is applied.

COVID-19 and Differential Income Recovery: Survey Evidence from Indian Punjab

The study examines changes in earnings of the workers over 1 year. The results show differential impact of coronavirus disease 2019 (COVID-19) on income of the workers. The findings suggest that workers, whose occupations were restricted in the initial phase of lockdown, continue to do worse even after lifting the restrictions. Females, casual workers and the less educated are among the worst affected by the economic shock. They continue to lag behind with no sign of catching up with other groups. The study asks for short- and long-term policy measures to address the issue.

Dampak Perubahan Laba ditinjau dari Return on Equity (ROA), Debt Equity Ratio (DER) dan Total Asset Turn Over (TATO) Pada Perusahaan Manufaktur di Indonesia

This study aims to determine the impact on earnings changes in terms of several aspects, namely return on equity (roe), debt to equity ratio (der), and total assets turn over (tattoos) in manufacturing companies on the Indonesian stock exchange in 2018-2021. This study uses a qualitative approach with secondary data sources obtained from the company's financial statements published on www.idx.co.id. The sampling technique in this study is the number of objects of companies listed on the IDX, where as many as 8 companies with data for 4 years so that the sample size is 32 data. The analysis carried out in this study is a panel data test which includes descriptive statistical analysis, Common Effects Model, Fixed Effects Model, Chow Test, Random Effects Model Test and Hausman Test (Software used to conduct this research is eviews version 10. Based on the results of the study it can be concluded that return on equity (roe), debt to equity ratio (der), and total assets turnover (tattoo) have partial and simultaneous effect on earnings changes, where the research that has been carried out obtains data taken based on the Common Securities Model

Financial Growth Assessment of Private Life Insurers in India: An Aggregative Study

Presently, Indian insurance industry has 57 insurance companies, out of which 24 are in the life insurance sector. Among all the life insurers, only LIC is the public insurer and the remaining 23 companies are private insurers. The entire route of allowing private insurance companies in India had begun in the early 1990s. A well-developed insurance sector with participation from both private and public players is the key to economic development as it delivers a source of long-term funds for infrastructure development. In this background, the study aims to examine the trend growth rates and the differences in growth rates of earnings and financial health indicators during the period 2010-11 to 2019-20. The findings of the study show mixed results with respect to earnings and financial health performance of private life insurers in India. To arrive at a meaningful conclusion, overall earnings and financial health indicators are measured. The overall results show that there has been no change in the overall earnings and financial health indicators as revealed by Chow test during the period under study. On the whole, it may be stated that in spite of significant positive growth in FDIR, the private life insurers have not shown satisfactory performance (i.e., no significant impact due to FDI hike) with respect to earnings and financial health indicators during the study period.

School Desegregation and Black Teacher Employment

Abstract Before the racial integration of schools in the southern United States, predominantly African American schools were staffed almost exclusively by African American teachers as well, and teaching constituted an extraordinarily large share of professional employment among southern Blacks. The large-scale desegregation of southern schools that occurred after passage of the 1964 Civil Rights Act represented a potential threat to this employment base, and this paper estimates how student integration affected Black teacher employment. Using newly assembled archival data from 759 southern school districts observed between 1960 and 1972, I estimate that a school district transitioning from fully segregated to fully integrated education, which approximates the experience of the modal southern district in this period, led to a 41.7% reduction in Black teacher employment. Additional results, including event-study specifications and models with extensive controls for concurrent policy changes, strongly suggest that these employment reductions were a causal effect of integration and not due to school district self-selection into desegregation. To study the broader impacts of reduced teaching employment, I estimate race-specific changes in occupations and earnings in the decennial Censuses and find that displaced southern Black teachers either entered lower skill occupations within the South or migrated out of the region to continue teaching and that integration-induced displacement led to substantial earnings reductions.