Influence Earnings Management Research Articles

Climate policy uncertainty and earnings management

I investigate how climate policy uncertainty (CPU) influences earnings management (EM). The analysis reveals that high levels of CPU are associated with a reduction in the absolute value of abnormal discretionary accruals. This relationship remains robust across two instrumental variable approaches, several internal and external governance factors, and various alternative measures of EM. Additionally, I find that the negative association between CPU and EM is more pronounced in firms with a higher likelihood of financial distress, greater institutional investor monitoring, and stronger corporate social responsibility (CSR) practices.

THE MEDIATING ROLE OF EARNINGS MANAGEMENT IN THE RELATIONSHIP BETWEEN THE FIRM LIFE CYCLE AND THE COST OF EQUITY: EVIDENCE FROM BANKS IN IRAQ

The present study seeks to examine the interaction among three separate variables. The initial variable relates to the organization's life cycle and financial attributes. The second variable pertains to the procedures of firm management that influence performance and financial condition, as demonstrated by earnings management. Investors manage the impact of the previous two factors by weighing the risks and potential gains, which the corporation terms as "the cost of equity." We utilized these variables to analyze 15 Iraqi commercial banks that have been listed on the Iraq Stock Exchange for 10 years, equivalent to 150 observations.Our quantitative assessment of the study variables, conducted using models from the relevant literature, has yielded significant findings. We have uncovered a direct correlation between the life cycle and earnings management, indicating a beneficial association. Moreover, we have revealed that each factor exerts a unique and favourable influence on the cost of equity. The correlation between the life cycle and earnings management has led to an increase in the favourable influence of earnings management on the cost of equity. Conversely, the life cycle now has an inverse impact on the cost of equity, with the cost of equity being mainly influenced by the maturity stage. These findings have important implications for stock market traders, as they guide them to direct their investments towards banks that offer higher returns relative to the level of risk, considering the age group and the administration's approach to managing announced profits. This study's implications for stock market traders are significant, as it provides them with valuable insights for making informed investment decisions. It also serves as a guide for future studies in this field.

Profitability and Earnings Persistence Drive Earnings Management in Manufacturing Firms

General Background: Earnings management significantly impacts stakeholders' decisions based on reported profits. Specific Background: This study examines the effects of profitability, accounting conservatism, liquidity, and earnings persistence on earnings management in manufacturing companies listed on the Indonesia Stock Exchange (IDX) from 2019 to 2023. Knowledge Gap: Previous research shows inconsistent findings, particularly regarding accounting conservatism and liquidity's effects, highlighting a need for further investigation. Aims: This research aims to clarify these influences within the Indonesian manufacturing sector. Results: Using quantitative analysis of 135 firms, findings reveal that profitability and earnings persistence positively affect earnings management, while liquidity negatively impacts it. Accounting conservatism does not significantly influence earnings management. Novelty: This study incorporates earnings persistence as a critical factor, contributing to existing literature. Implications: The results suggest investors should exercise caution in their decisions due to potential financial reporting manipulation and emphasize the need for improved transparency in financial reporting practices. Highlights: Profitability and earnings persistence positively influence earnings management, indicating a tendency for managers to adjust earnings when profits are high. Liquidity shows a significant negative effect on earnings management, suggesting that firms with better liquidity are less likely to engage in earnings manipulation. Accounting conservatism does not significantly impact earnings management practices, highlighting a potential gap in the application of conservative accounting principles. Keywords: Earnings Management, Profit Persistence, Accounting Conservatism, Liquidity, Earnings Persistence

Peran Penghindaran Kebangkrutan dalam Mengakselerasi Earning Management

This study aims to analyze the impact of financial distress on earnings management within companies listed on the Indonesia Stock Exchange (IDX) from 2019 to 2021. Utilizing a purposive sampling technique, the research focuses on 44 companies that are noted for their special status on the IDX. Key control variables examined include company size, leverage, cash flow operations (CFO), growth, profitability ratios (ROA), equity issuance (EISSUE), and debt issuance (DISSUE). The findings reveal that financial distress significantly and negatively influences earnings management, indicating that distressed companies are less likely to engage in manipulative financial reporting. Furthermore, the study identifies that all control variables contribute to a nuanced relationship between financial distress and earnings management. Specifically, variables such as size, CFO, leverage, ROA, EISSUE, and DISSUE exhibit a significant positive impact on earnings management, suggesting that larger companies with higher leverage and profitability are more prone to earnings manipulation. Conversely, the growth variable demonstrates a significant negative effect, implying that companies experiencing growth are less likely to manage earnings. These insights contribute to a deeper understanding of the dynamics between financial distress and corporate financial behavior, offering valuable implications for investors, regulators, and policymakers.

PENGARUH KINERJA KEUANGAN, KEBIJAKAN DIVIDEN DAN KEPEMILIKAN MANAJERIAL TERHADAP MANAJEMEN LABA

This research aims to determine the influence of financial performance, dividend policy and managerial ownership on earnings management. The type of research used is a quantitative approach with associative methods. The sampling technique in this research is purposive sampling. The population of this research is 125 non-cyclical consumer sector companies listed on the Indonesia Stock Exchange and after following the sampling criteria, there were 13 companies with a research period of 5 (six) years producing 65 observation data. The data analysis technique used is panel data regression using E-views 12 software. The F test results show that financial performance, dividend policy and managerial ownership simultaneously influence earnings management. The t test results show that financial performance has an effect on earnings management, while dividend policy has no effect on earnings management and managerial ownership has no effect on earnings management.

How personal values influence earnings management ethics: the mediation role of moral disengagement

ABSTRACT Earnings management (EM) is a critical ethical issue for the accounting profession. However, it remains unclear why accountants differ in their ethical judgements of EM, with some evaluating it as ethically acceptable while others do not. From the perspective of personal values, we explore how personal values influence accountants’ ethical judgement of EM through the mediation role of moral disengagement. A survey of 554 Chinese practicing accountants found that accountants with higher resultant conservation values were less likely to morally disengage, thus less tolerant of accounting manipulation, while accountants with higher resultant self-enhancement values were more likely to morally disengage, leading to greater tolerance for accounting manipulation. The results showed that moral disengagement fully mediated the relationship between personal values and ethics in accounting manipulation. Moreover, moral disengagement had no significant effect on ethics in operating manipulation. Our study has practical implications for educators, regulators, and companies combating EM.

Earnings Management Trend in Manufacturing Companies Sub-Sector Food and Beverage Listed on the Indonesia Stock Exchange Year 2019-2023

This study aims to analyze the trend of earnings management in manufacturing companies operating in the food and beverage sub-sector listed on the Indonesia Stock Exchange. Earnings management trends encompass methods used by companies to manipulate or manage their financial statements. Factors influencing earnings management include tax planning, income tax expenses, and profitability. The management's goal is to enhance corporate earnings to reflect stable profits, thus accurately portraying the company's financial performance in future periods. The study population consists of 45 companies, with a sample of 9 companies selected using purposive sampling. Data collection utilized secondary data from quarterly financial reports of manufacturing companies listed on the Indonesia Stock Exchange from 2019 to 2023. The research employed descriptive analysis to assess earnings management trends as predictors of profit increases. The findings reveal significant fluctuations in earnings management practices among food and beverage manufacturing companies listed on the Indonesia Stock Exchange during the period from 2019 to 2023.

The Influence of Profit Management and Corporate Governance on Tax Aggressiveness

This research aims to determine and evaluate the influence of earnings management and corporate governance on tax aggressiveness. This type of research is associative quantitative. The data used is secondary data. The population in this research is food and beverage sub-sector companies listed on the Indonesia Stock Exchange (BEI) in 2018-2022. The sample data collection technique in this study used purposive sampling, namely a technique that takes into account criteria, so that the sample obtained using this method was 9 companies. The data analysis technique used is panel data regression analysis using E-views 9 software. The research results show that earnings management and corporate governance influence tax aggressiveness. Then, partially earnings management has no effect on tax aggressiveness. Meanwhile, corporate governance variables influence tax aggressiveness. This result is because the higher the corporate governance, the lower the level of tax aggressiveness taken by the company

Does firm-level political risk influence earnings management?

Does firm-level political risk influence earnings management?

Exploring the Influence of Earnings Management on the Value Relevance of Financial Statements: Evidence from the Bucharest Stock Exchange

Exploring the Influence of Earnings Management on the Value Relevance of Financial Statements: Evidence from the Bucharest Stock Exchange

PENGARUH MANAJEMEN LABA, STRUKTUR MODAL DAN PERTUMBUHAN PERUSAHAAN TERHADAP NILAI PERUSAHAAN DENGAN PROFITABILITAS SEBAGAI VARIABEL INTERVENING

The agricultural sector plays a crucial role in advancing Indonesia’s economy and enhancing foreign exchange earnings through labor absorption. This study aims to examine the influence of Earnings Management, Capital Structure and Company Growth on Firm Value with Profitability as an Intervening Variable in Agricultural Sector Companies Listed on the Indonesia Stok Exchange during 2020-2022. The research employs a quantitative method. This study’s data analysis and hypothesis testing utilize Structural Equation Modeling – Partial Least Square (PLS-SEM). The hypothesis results using indicate that Earnings Management significantly negatively impacts Profitability, Capital Structure has a positive but not significant impact on Profitability, while Company Growth has a negative but not significant impact on Profitability. Additionally, Earnings Management has a significant positive impact on Firm Value, Capital Structure has a positive but not significant impact on Firm Value, and Company Growth has a significant positive impact Firm Value, Profitability has a significant positive impact on Firm Value. The results of the indirect effects hypothesis testing show that Earnings Management has a negative but not significant impact on Firm Value through Profitability, Capital Structure has a positive but not significant impact on Firm Value through Profitability and Company Growth has a negative but not significant impact on Firm Value through Profitability.

The Influence of Company Size, Tax Planning, and Deferred Tax Assets on Non-cyclical Consumer Company Earning Management

This study examines the influence of firm size, tax planning, and deferred tax assets on the manipulation of earnings in non-cyclical consumer companies that are publicly traded on the Indonesia Stock Exchange. The primary goal is to examine the connections between these variables and their combined impact on earnings manipulation. The study selects 64 organizations through purposive sampling and uses associative quantitative research methods to assess secondary data from their financial reports. The analysis indicates that company is no significant impact on earnings management from company size, tax planning, or deferred tax assets, whether examined individually or collectively. This indicates that larger corporations, although more widely known and subject to more oversight, do not participate in profit manipulation to a greater extent than smaller enterprises. Similarly, tax planning and deferred tax assets are primarily used to enhance fiscal efficiency rather than manipulate results. The low coefficient of determination suggests that there are other elements, not considered in this study, that have a greater impact on earnings management. In line with previous research, these results highlight the fact that deferred tax assets, firm size, and tax planning are not the main factors influencing earnings management in Indonesian non-cyclical consumer companies. More variables that add to a more thorough understanding of the factors influencing earnings management should be found through longer-term and larger sample sizes in future studies.

Earnings management and judicial recovery: evidence for brazilian companies

Purpose: This study investigated the relationship between judicial recovery and insolvency with the Real Earnings Management (REM) level of publicly traded Brazilian companies in the period 2016-2020. Methodology: The estimated econometric model was panel data regression. The dependent variable was the level of REM measured based on Roychowdhury (2006), which estimates the manipulation of real activities through the analysis of abnormal movements in operating cash flow, discretionary expenses and production costs. The sample collected from 2016 to 2020 consists of 723 non-financial companies. Results: As main results, the study was able to demonstrate that there is an inverse relationship between judicial recovery and insolvency with earnings management. In other words, companies that are in judicial recovery or insolvent tend to have less earnings management. The findings of this research suggest that managers of companies undergoing judicial recovery have less incentive to engage in discretionary practices, as they are thus able to highlight their financial difficulties and obtain the judicial benefits of the process. Contributions of the Study: Although many studies evaluate the factors that influence earnings management, this work seeks to contribute to the study of accounting earnings management and uses an operational proxy, associating it with companies undergoing judicial recovery. Furthermore, with evidence of less earnings management by these companies, there is a possible improvement in the shareholders' perspective regarding the future of the company's finances, thus also contributing to investors' decision-making.

THE EFFECT OF MANAGEMENT CHARACTERISTICS ON EARNINGS MANAGEMENT THROUGH PERCEIVED AMBIGUITY IN ACCOUNTING STANDARDS

We investigated the influence of management characteristics, specifically narcissism, impulsivity, construal mindset, and Machiavellianism, on perceived ambiguity toward accounting standards and the impact of perceived ambiguity toward accounting standards on earnings management tendencies. We surveyed 116 respondents from undergraduate, master's, and doctoral programs at various universities in Indonesia. We found that construal mindset, impulsivity, and Machiavellianism positively were related to perceived ambiguity toward accounting standards. Perceived ambiguity toward accounting standards has also been shown to affect earnings management tendencies positively. However, we did not find that narcissism was related to perceived ambiguity toward accounting standards. Additionally, we did not find that narcissism and construal mindset were positively related to earnings management tendencies when mediated by perceived ambiguity toward accounting standards. This research aims to provide a deeper understanding of how management characteristics influence earnings management practices.

How Do Asymmetric Information and Financial Factors Influence Earnings Management?

How Do Asymmetric Information and Financial Factors Influence Earnings Management?

Tax strategies drive earnings management in Indonesia

This study investigates the direct and indirect effects of tax planning and deferred tax expense on earnings management, using tax rates as a moderating variable, among LQ45 index companies on the Indonesian Stock Exchange (BEI) from 2017-2019. Using a quantitative descriptive method and Smart PLS 3 software for analysis, the study found that tax planning significantly influences earnings management, while deferred tax expense does not. Tax rates moderate the impact of tax planning but not deferred tax expense on earnings management. These results emphasize the role of tax planning in earnings management and suggest that tax rates should be considered in regulatory policies. Future research should explore additional variables like company age and size. Highlight: Tax planning significantly influences earnings management. Tax rates moderate tax planning's effect on earnings management. Deferred tax expense has no direct impact on earnings management. Keyword: Earnings management, tax planning, deferred tax expense, tax rates, Indonesian Stock Exchange

Earnings Management, Tax Avoidance, and Profitability Among MNC’s in Indonesia

The study examines the influence of earnings management and tax avoidance on the profitability of parent multinational companies in Indonesia, except the financial sector, actively listed on the Indonesia Stock Exchange during the research period. The research period used in this study starts from January 1, 2019, to December 31, 2022. The research results were processed using panel data regression, the best model regression was random effect model. One independent variable, earnings management, was found not to significantly affect profitability. However, the study found that the level of tax avoidance has a positive and significant impact on company profitability. The size of the board of commissioners' independence as a moderating variable did not strengthen or weaken the independent variables simultaneously or partially against company profitability, but independence board of commissioners could significantly affect on profitability as independent variables. This is a quantitative research with hypothesis testing. The implications of this study state that there is a high tax aggressiveness in Indonesia due to the actions of multinational companies in global transactions, thus recommending that the government further evaluate current international tax policies.

Do Firm Size, Corporate Governance, and Tax Panning Effect on Earning Management?

This research aims to test the influence of firm size, good corporate governance, and tax planning on earnings management. The type of research used is quantitative descriptive verification research. This research uses a sample of retail firms in the Food Retail and Distributors, Supermarkets and Convenience Stores, and Electronics Retail sectors, which are listed on the Indonesia Stock Exchange (IDX) for the 2017-2021 period. The sampling technique in this research is purposive sampling with a sample size of 40 firms. This research uses secondary data, namely firm financial reports obtained from the official websites www.idx.co.id and www.idnfinancials.com. The analytical method used is multiple linear. The results of this research indicate that firm size, corporate governance, and tax planning do not affect earnings management. The managerial implication of this research is that firm managers need to understand that firm size, CG, and tax planning are interrelated in influencing earnings management. Managers must ensure that the tax management strategies used do not violate GCG principles and remain within the corridors of applicable tax regulations earning.

Pengaruh Perencanaan Pajak, Sales Growth, dan Ukuran Perusahaan Terhadap Manajemen Laba

The income statement in the financial report is one of the important indicator for shareholders and creditors to obtain information on profit and financial performance of a company and make investment decisions in a company. Profit reflects that the company has achieved good financial performance. Managers will carry out earnings management practices to influence several parties who have different interests in a company with the aim of ensuring that the financial reports presented are in line with the expected profit targets. This research aims to prove whether tax planning, sales growth, and firm size influence earnings management. The theories underlying this research are Agency Theory, Positive Accounting Theory, and Signalling Theory. This study processed 147 samples of consumer non-cyclical sector registered on Indonesia Stock Exchange in 2020-2022. In concluding this research, sales growth and firm size to state that both have a positive influence on earnings management, and that there is insufficient evidence that tax planning has a positive influence on earnings management.

Creditor Protection and Enterprise Earnings Management —A Test Based on Bond Covenants

ABSTRACT Excessive earnings management can significantly reduce the quality of accounting information, consequently harming the interests of investors and creditors. In the Chinese market, research on earnings management focuses primarily on corporate governance and external environmental viewpoints, with limited literature addressing debt governance. This paper centers on exploring the protective impact of bond covenants, revealing their inhibitory effect on both accrual and real earnings management through two potential mechanisms (agency conflicts and risk-taking). Furthermore, this study conducts a heterogeneous analysis from various perspectives, identifying how bond covenants influence earnings management in different ways and underscoring the moderating role played by underwriters. The findings offer theoretical insights for the development of a high-quality information disclosure system.