Earnings Management In Companies Research Articles

The Impact of Dividend and Tax Avoidance on Earning Management of Companies

Using a sample covering practically all dividend-paying oil and gas companies companies in Pakistan during 2011–2020, we document that earnings management in these companies is driven by two concurrent forces: the willingness to pay (tax-exempt) dividends and avoiding unnecessary company income tax. Moreover, we show that the need for income increasing earnings management enabling current dividend distribution is mitigated by the amount of retained earnings from prior years. This article adds to the existing literature by providing empirical evidence for dividend and tax-driven earnings management in private oil and gas companies facing neither political pressures nor capital market incentives for earnings disclosures.

What Earnings Management Has to Do with Corporate Social Responsibility

With the continuing rise of attention towards societal challenges like, e.g., climate change, Corporate Social Responsibility (CSR) becomes an increasingly important topic for companies. While there is no question that CSR activities are on the rise, the connection towards Earnings Management in companies is less clear. Therefore, this research paper not only aims to provide an up-to-date picture on the literature addressing this interconnection, but also provides a profound base for a more solid theoretical framework. Thus, it delivers a critical basis for further empirical analyses in this field. In order to illustrate this interconnection between those two topics, this paper presents an SLR analysis of articles published in the Chartered Association of Business Schools (CABS) or Australian Business Deans Council (ABDC), focusing on empirical analyses of CSR performance and Earnings Management. Overall, it can be stated that CSR performance has a negative influence on Accrual-Based Earnings Management, while findings on the influence on Real Earnings Management are contradicting. Furthermore, the relationship of CSR performance and Accrual-Based Earnings Management/Real Earnings Management is especially vague when the used methods are moderated by different variables such as family involvement or managerial entrenchment. While the connection between Accrual-Based Earnings Management and CSR performance is widely covered in the existing literature, the relationship between Real Earnings Management and CSR performance is clearly less outlined. This research paper makes key contributions to the existing literature, as it combines and structures results of conducted studies during the last ten years and elaborates on the differences on commonalities of the results. This analysis also suggests that other factors that possibly influence Earnings Management or CSR should be included in a future research model for upcoming analyses. It places the findings of earlier studies into the context of the Ethical Approach, creating a roadmap for the future.

Earnings management and analyst forecast

This study explores the relationship between surplus management, analysts’ attention, and earnings forecasts, which we empirically analyze by selecting selected A-share listed companies in China from 2015 to 2022 as a research sample. Our findings indicate that the higher the degree of the company's surplus management, the lower the degree of analysts’ attention. Furthermore, the higher the degree of the company's earnings management, the lower the degree of analysts’ over-attention. Moreover, the higher the branch's earnings management degree, the lower the analysts’ earnings forecasting accuracy. Finally, substantial differences exist in the relationship between earnings management and analysts’ forecasts, such as business property rights.

PENGARUH CORPORATE GOVERNANCE TERHADAP MANAJEMEN LABA PADA PERUSAHAAN PERTAMBANGAN YANG TERDAFTAR DI BURSA EFEK INDONESIA

This research aims to examine the influence of managerial ownership, institutional ownership, composition of the independent board of commissioners, audit committee and audit quality on earnings management of mining companies listed on the Indonesian Stock Exchange in 2017-2021. Type of quantitative research. The data source is in the form of company financial reports obtained from the website. The data analysis technique uses multiple linear regression analysis. The research results show that institutional ownership and audit committees have no effect on earnings management, while managerial ownership, independent board of commissioners and audit quality have no effect on company earnings management.

DOES INDEPENDENT COMMISSIONER CONTRIBUTE TO DECREASE EARNINGS MANAGEMENT AND TAX AVOIDANCE ACTIVITIES

This study examines the independent commissioner's role in moderating earnings management's effect on tax avoidance practices in the building construction industry. This study uses data from building construction sector companies listed on the Indonesia Stock Exchange during 2017-2020. Of the 15 companies observed, 42 samples were obtained using purposive sampling to be used in the study. They are processing data using regression analysis with cross-sectional data. The study results show that the company's earnings management positively affects tax avoidance activities carried out by building construction companies. Meanwhile, an independent commissioner does not affect the relationship between earnings management practices and corporate tax avoidance. Keywords: Corporate Governance, Earnings Quality, Tax Planning

The Effect of Profitability and Green Accounting on Earnings Management in Companies on the Indonesia Stock Exchange (IDX) during Covid 19 Pandemic

The Covid 19 pandemic has been going on for the past three years. There have been many changes that have occurred in human life at this time. The Covid 19 pandemic has not only disrupted the health sector, but also disrupted the economic sector. The existence of restrictions on social activities and regional quarantine has hampered economic activity so that it has an impact on business activities which has worsened the level of profitability and economic growth of companies, especially in Indonesia. Not to mention that companies have to pay more attention to Green Accounting due to the prolonged pandemic. The budgets of these companies related to Green Accounting will certainly affect the financial statements of these companies. This of course can affect the performance of existing financial reports in companies that will be related to earnings management of a company. The implementation of earnings management will also affect internal and external parties of the company. Earnings management is an action taken by company management to influence reported earnings which can provide information about economic benefits to both internal and external parties. Where earnings management is a central issue and has become a common phenomenon that occurs in a number of companies today. Earnings management practices have increased every year until now.

The Influence of Credit Risk on Company Earnings Management (Empirical Study of Banking Companies Listed on the IDX)

This research aims to determine the effect of credit risk on earnings management in banking companies listed on the Indonesia Stock Exchange in 2019-2022. This research uses descriptive statistical analysis and multiple regression analysis using SPSS. The research data comes from annual financial reports obtained from the BEI website and the company's official website. Sample selection used purposive sampling technique so that 42 companies were obtained for a period of 4 years, but there were outlier data so that the total sample was 80 data. This research shows that credit risk as proxied by Gross NPL and Net NPL simultaneously influences earnings management in banking companies listed on the Indonesia Stock Exchange in 2019-2022.

Exploring earnings management: Institutional ownership and audit size in Malaysia’s sustainability pathway

This study aims to investigate the relationships between discretionary accrual earnings management (DEM), real earnings management (REM), institutional ownership, and audit quality in Malaysian firms. The study's findings are expected to offer insights into how these factors may influence Malaysia's progress towards the Sustainable Development Goals. We examine the relationship between DEM and REM to identify the potential simultaneous use of earnings management strategies. Additionally, we explore the impact of institutional ownership and audit firm size on a company's earnings management practices.  Using data from the Kuala Lumpur Stock Exchange (KLSE) spanning 2016-2018 we conducted statistical analyses, including ANOVA, t-tests, and multiple regression. There were notable correlations between DEM and REM, suggesting that these earnings management techniques are being used concurrently. Notably, institutional ownership and audit firm size played substantial roles in firms' earnings management practices. Companies with higher institutional ownership and larger audit firms tended to exhibit lower levels of DEM and REM. However, these factors did not appear to moderate the DEM-REM relationship.  These findings have critical implications for regulators and policymakers in addressing earnings management practices and enhancing corporate governance in Malaysia. Focusing on institutional ownership and audit firm size may help curtail such practices, contributing to Malaysia's progress towards the Sustainable Development Goals. Future research should explore other potential moderating variables and distinctive corporate governance features that could also impact the DEM-REM relationship.

Connecting Top Management Team (TMT) Characteristics to Earning Management: Sample Companies in Saudi Arabia

This study investigates whether specific characteristics of a firm's top management team (TMT) affect the company's earnings management (EM) in Saudi Arabia. The data was collected from 163 companies listed in Saudi Arabia from 2017 to 2021. The TMT characteristics were measured using two different criteria: the academic qualifications and the management expertise of the team. Two models were used to analyze the data: the modified Jones model (1995) was used to measure accrual management, and the Kothari model (2006) was used to estimate accrual discretionary. The research findings revealed that TMT characteristics do not significantly impact EM in Saudi Arabia. According to the Kothari model approach (2006), both the academic qualifications and the management expertise did not influence EM. However, when we followed the Jones model approach (1995), the results showed that management expertise significantly and positively impacts EM. On the other hand, the academic qualifications do not seem to significantly impact EM.    

Is earnings management impacted by audit fees and auditor tenure? An analysis of the Big Four audit firms in the US market

Research background: Audits are intended to ensure the reliability of financial statements, as this is fundamental for different stakeholders. However, both auditor tenure and audit fees could affect the earnings management of companies. In 2014, the European Union established a mandatory audit firm rotation policy. In the United States, although there is still no mandatory regulation in this regard, there has been a large public debate over the advisability of this policy. Another unresolved controversy is whether audit fees determine audit quality. Purpose of the article: The aim of this research is to study the effect of auditor tenure and audit fees on earnings management, i.e., to determine whether a longer-term relationship between the auditor and the audited company, as well as higher audit fees, reduce the audited company's earnings management, thereby making the financial statements more reliable for stakeholders and increasing the quality of the audit report. In addition, the Big Four auditing companies in the United States were analyzed in order to determine the influence of corporate culture. Methods: A sample of companies listed in the S&P 500 stock market index was employed for the analysis, covering the years 2012 to 2021, resulting in a dataset comprising 3,010 observations. To examine the research hypotheses while mitigating the potential bias from omitted variables, a linear regression analysis was conducted using panel data with fixed effects regression. To enhance the robustness of the results, winsorized variables were also employed. Findings & value added: Overall, the results confirm that the quality of financial statements improves as auditor tenure increases, and so implementing a mandatory auditor rotation may not be in a company’s best interests. The results also support the market segmentation theory, as higher audit fees are aligned with higher quality financial reporting. Furthermore, by analyzing the Big Four audit companies in the US, it is shown that the influence of audit fees and auditor tenure on earnings management also depends on the internal aspects of the particular audit firm, especially its ethical culture. In sum, US policymakers should neither set limits on audit fees nor enforce a mandatory audit firm rotation similar to that of the EU.

Studi Literatur: Analisis Tentang Pengaruh Beban Pajak Terhadap Manajemen Laba

This study aims to explain the effect of the tax burden on earnings management. The framework built is the effect of tax burden and tax planning can affect earnings management incompanies. This research method uses a systematic literatur study method and the application of PoP (Publish or Perish). Keywords such as “earnings management”, “tax espense”, and “tax planning” are used in research to find articles related to research problems. The object of this research was obtained as many as 31 articles taking  into account certain criteria, with the period from 3017 to 2022. The results of the research show that the tax burden for companies can reduce the amount of profits. Researchers also found that tax burden and tax planning can affect earnings management. This causes management to carry out earnings management through tax planning and tax burden on the financial statements.

The effect of audit quality and capital intensity ratio on earning management in sharia listed companies

Purpose - This study aims to determine the effect of audit quality and capital intensity ratio on earnings management in companies listed on the Indonesia Sharia Stock Index in 2017-2020.Method - This study is quantitative research using secondary data obtained from the summary of audited financial statements. Data sampling was selected by purposive sampling method based on certain criteria. The analysis technique used is multiple linear regression.Result - The results show that the size of the public accounting firm has a negative effect on earnings management; it is more credibility consideration. The audit tenure has a positive effect on earnings management. It creates an emotional connection that is reluctance to disclose misappropriation. The auditor industry specialization has a negative effect on earnings management; it is more in-depth various accounting policies to find earnings management. The capital intensity ratio does not affect earning management; it is business and finance consideration. Accounting policies in depreciation is carry out when management has decided to invest in fixed assets.Implication - Sharia companies should pay attention to audit quality and capital intensity ratios in relation to earnings management.Originality - This is a study to test the existence of earnings management in Sharia companies in terms of audit quality and capital intensity ratio factors.

PENGARUH UKURAN PERUSAHAAN TERHADAP MANAJEMEN LABA DENGAN PROFITABILITAS SEBAGAI VARIABEL INTERVENING

The purpose of this study is to describe and analyze the effect of company size on earnings management through the profitability of the Automotive & Component Industry Companies listed on the IDX. This type of research is a quantitative descriptive research. The population in this study are Manufacturing Companies in the Automotive & Components Miscellaneous Industry sub-sector which are listed on the IDX for the 2018-2021 period. A sample of 8 companies was obtained from purposive sampling technique. Data analysis technique uses Partial Least Square (PLS). Based on the results of the analysis, it was found that company size has no significant effect on company profitability, company size has a significant positive effect on company earnings management, profitability has a significant effect on company earnings management, company size has no significant effect on earnings management with profitability as an intervening variable in automotive & automotive industry companies. Components listed on the IDX.

The Influence of Information Asymmetry, Profitability and Company Size on Earnings Management in Companies in the Goods and Consumption Industry Sector Listed on the Indonesian Stock Exchange for the 2016-2020 Period

This study aims to determine the effect of information asymmetry, profitability and company size on earnings management in companies listed on the Indonesia Stock Exchange for 2016-2020 period. Several previous studies on earnings management have shown different results. Therefore, other studies need to be conducted to re-test the theory of earnings management. The population of this study were 53 companies in the consumer goods industry sub-sector. The sampling method used is the purposive one, so that 22 sample companies are obtained for the five years of monitoring with 86 results (observations). Research data were obtained from sample companies downloaded from the Indonesia Stock Exchange website. The data analysis techniques used are descriptive statistical analysis and multiple regression analysis. The data analysis processes carried out first are descriptive statistics, classical assumption test, multiple regression analysis and then hypotheses testing. The results of this study partially show that only profitability has a significant effect on earnings management, while information asymmetry and company size have no effect on it. The results of this study simultaneously show that information asymmetry, profitability and company size have a significant effect on earnings management.

The effects of CPC 47 on earnings management in companies listed in B3

Purpose: The objective of this study is to analyze the effects of adopting CPC 47 on the level of the earnings management of companies listed in the Brazilian capital market.
 Methodology: The sample used in this study is composed of 207companies listed in B3 in the observation period 2012-2021 totaling 2070 observations. The approach is quantitative, using multiple linear regression with balanced panel data. Dechow, Hutton, Kim and Sloan (2012) and Kothari, Leone and Wasley (2005) models were used to improve the discretionary accruals and an earnings management model with control and interest variables.
 Results: The results did not confirm the hypothesis that the adoption of CPC 47 affected the level of results management in the analyzed period but showed that indebtedness and operating cash flow explain discretionary accruals, regardless of the adoption of the pattern of revenue recognition. This evidence about earnings management increased with the adoption of CPC 47 was contrary to Baldissera, Gomes, Zanchet and Fiirst (2018), however, according to the findings of Grecco (2013), Jewel and Nakao (2014) and Braga (2020) in relation to the effects of accounting standards. The results indicate that companies with higher operating cash flow can generate accounting information with better quality regardless of the effects of the adoption of CPC 47. The period of the coronavirus pandemic did not significantly affect earnings management levels.
 Contributions of the Study: As a contribution, the study expands the theoretical knowledge about the effects of CPC 47 on earnings management. Additionally, in a practical way, it collaborates with regulatory organs, auditors, executives, stakeholders, and the financial market in general.

The effect of demographic factors among the nomination committee members on earnings management in companies listed on the Amman Stock Exchange

This study aims to investigate the effect of demographic factors for nomination committee (NC) on earnings management (EM) in companies listed on the Amman Stock Exchange. The independent variables are gender, age, level of education, and experience, while the dependent variable is EM. The study utilizes various statistical processes through SPSS 28. The results indicate there are no statistically significant differences at the level of significance (α=0.05) in the total study “EM in the listed companies” due to the age and experience variables. In addition, there are statistically significant differences at the level of significance (α=0.05) in the total study “EM in the listed companies” due to the gender variable, in favor of males and due to the level of education. Moreover, there is a significant difference between two degrees of Diploma and master’s degree in favor of the Master's degree by a mean of 3.701, but the Diploma category mean is 3.400 and the significant difference between Diploma and Ph.D. is in favor of the Ph.D. category by mean (3.722), but the Diploma category mean is (3.400).

Earnings management model for Visegrad Group as an immanent part of creative accounting

Research background: Creative accounting practices do not frequently violate the law and are not considered illegal; however, accounting managers may exploit legal ambiguities to portray the company's financial standing in accordance with management preferences. Therefore, the analysis is focused on the detection of earnings management in companies operating in the Visegrad Group, which represents one of the most commonly used techniques for revealing creative accounting. Purpose of the article: The aim of the presented study is to reveal the presence of creative accounting through the detection of earnings management in the countries of the Visegrad Group and, based on the detected results, to propose a regression model of earnings management in the Visegrad Group. Methods: To reveal the use of creative accounting in the Visegrad Group, ten selected models of earnings management were applied during the period 2016?2020 to a set of 8,134 companies. The Mann-Whitney test and multiple linear regression were used to verify the existence of earnings management. These findings served as the basis for the creation of the linear regression model of earnings management in the Visegrad Group. Findings & value-added: The presence of earnings management was best captured by the Hribar and Collins model in companies operating in the Visegrad Group in the period 2016?2020. The findings also confirmed that positive discretionary accruals acquired higher values over the entire period when compared to negative discretionary accruals, confirming that companies in the surveyed group manage their profits primarily by increasing them. Therefore, we created a regression model, that can serve as a unique basis and is capable of revealing the use of earnings management in the Visegrad Group, as until now nothing like this has been implemented in these countries. In conclusion, this study offers insights for academicians and researchers on creative accounting in the selected period. Lastly, the study contributes to the existing theory by conducting new research on the earnings management determinants of the countries studied.

A Comparative Study to Reveal Earnings Management in Emerging Markets: Evidence from Tunisia and Iraq

Purpose: The purpose of the study is to compare and evaluate Earnings Management in Tunisia and Iraq.   Theoretical framework: Earnings Management is an important topic that has been studied by a significant number of researchers, as well as those who are interested in the accounting profession. Earnings Management has gotten a lot of attention from academics, professionals, and other interested parties in recent years (e.g. Kliestik et al., 2020; Rahman et al., 2021; Gamra &Ellouze, 2021)   Design/methodology/approach: The sample includes ten banks listed on the Bourse of Tunisia and Iraq Stock Exchanges for the year 2017. We have used a model of Kothari et al., (2005) as a tool to measure Earnings Management in both markets.   Findings: The result of the study indicates that companies listed in the two markets exercise Earnings Management. Practices for managing earnings are used to either enhance, decrease, or balance out earnings.   Research, Practical & Social implications: the approaches to Earnings Management take considerably different directions.  As a result, the trend in Tunisia was among of profit growth. in contrast, the companies listed in (ISE) engage in Earnings Management with the intent of cutting profits. The evident indecait that taxation on businesses, political pressure from governments, and other factors may all be contributing factors to rising or falling earnings management practies.   Originality/value: the fact, our current study is the first to compare earnings management in companies operate in both the markets of Tunisia and Iraq.

MANAJEMEN LABA PERUSAHAAN KELUARGA INDONESIA

The purpose of this study is to test whether family ownership has an effect on earnings management in companies listed on the Indonesia Stock Exchange. The data collection method used purposive sampling. The companies used in this study found 70 companies per year from 2015 to 2017 with a total of 210 observational data. The variables used in this study were family ownership and earnings management. The research model used is the estimation of the use of panel data regression models with data taken from the financial statements of observation companies. There is 1 development model to test the hypothesis used in this study. The results of this study prove that family ownership has an effect on improving the earnings management of manufacturing companies listed on the Indonesia Stock Exchange in 2015-2017.

PENGARUH TAX PLANNING TERHADAP MANAJEMEN LABA PADA PERUSAHAAN MANUFAKTUR SUB-SEKTOR MAKANAN DAN MINUMAN DI BURSA EFEK INDONESIA TAHUN 2019-2021

Profit is a form of management demand whose quality needs to be proven to show the company's development. However, if it turns out that there are unreported earnings, it cannot provide the actual situation where there may be opportunities to practice earnings management. To reveal earnings management, there are various strategies in it, including tax planning. The study was conducted by the author to examine the effect of tax planning on earnings management in companies listed on the Indonesia Stock Exchange in the food and beverage sub-sector for the 2019-2021 period. The sample used as many as 26 companies. The sampling technique used was purposive sampling. The type of data used was quantitative data with descriptive data analysis techniques, classical assumption test, multiple linear regression analysis, coefficient of determination, F test and T test using SPSS 26. Based on the results of the F test and T test, it was concluded that tax planning has a negative effect on earnings management and there is no simultaneous effect between variable X and variable Y.