Influence Earnings Management Research Articles

Corporate Governance and CSR Disclosure: Earnings Management as Moderating Variable

The purpose of this study is to examine the moderating influence of earnings management on CSR disclosure as it relates to corporate governance. From 2014 to 2018, firms in the mining sector that were listed on the Indonesia Stock Exchange were the subject of this study. In order to check for consistency in the outcomes, this study additionally employs two control variables. Theories are developed using prior research, agency theory, and legitimacy theory. Of the 110 companies in the population, 22 were chosen as the study's sample. Purposive sampling with moderated regression analysis (MRA) was the strategy used. According to the regression analysis, managerial ownership has a negative impact on CSR disclosure, while institutional ownership and the board of directors have a positive effect. On the other hand, CSR disclosure is unaffected by the audit committee and independent board of commissioners. The relationship between CSR disclosure and corporate governance cannot be mediated by earnings management.

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.

The Effect of Leverage, Good Corporate Governance and Company Growth on Earnings Management with Company Size as an Intervening Variable

This research aims to analyze the extent of the influence of Leverage, Good Corporate Governance and Company Growth on Earnings Management with Company Size as an Intervening Variable. This research uses quantitative methods. With a research data population of 210 manufacturing companies listed on the Indonesia Stock Exchange per year, using purposive sampling techniques a sample of 290 companies was obtained during the 2017-2021 period. Data were analyzed using SPSS version 25. The results of the analysis show that: (1) Leverage partially influences company size. (2) Good Corporate Governance partially influences company size. (3) Partial company growth has no effect on company size. (4) Leverage partially influences Earnings Management. (5) Good Corporate Governance partially influences Earnings Management. (6) Company growth does not partially affect Earnings Management. (7) Company size partially has no effect on Earnings Management. (8) There is no direct influence between Leverage on Earnings Management through Company Size as an intervening variable. (9) There is a direct influence between Good Corporate Governance on Earnings Management through Company Size as an intervening variable. (10) There is no direct influence between Company Growth on Earnings Management through Company Size as an intervening variable.

Manajemen Laba: Strategi Bisnis, Investment Opportunity Set, Managerial Entrenchment dan Ukuran Perusahaan

One of the most important information is profit information that investors can consider when making investment decisions. Company managers use this information to commit financial statement fraud at profit levels to increase company profits, one of which is earnings management practices. The purpose of this research is to examine and determine the effect of business strategy, investment opportunity set, managerial entrenchment and firm size on earnings management. The population used in this study are transportation and logistics companies listed on the Indonesia Stock Exchange (IDX) in the 2017-2021 period. Sampling by method purpose sampling and according to the criteria obtained 70 sample units from 14 companies within 5 years. Data analysis using panel data regression. The results of the study show that business strategy, investment opportunity set, managerial entrenchment and firm size simultan eously influence earnings management. Partially, business strategy, managerial entrenchment and the size of the company has no effect on Earnings Management. Whereas, investment opportunity set has a positive influence on Earnings Management.

Impact of Auditor’s Independence on Earnings Management of Listed Deposit Money Banks in Nigeria

This research investigates the impact of auditor’s independence on earnings management in listed deposit money banks in Nigeria. Utilizing a correlational research design, the study explores the relationships between auditors’ independence, measured by audit firm specialization, audit fee, and audit firm size, and earnings management, proxied by accrued earnings. Secondary data from the annual reports and accounts of twelve selected banks over ten years (2013-2022) were analyzed using fixed effect estimation. The findings reveal that audit fee, audit size, and audit tenure positively influence earnings management. The positive coefficients suggest that higher audit fees, larger audit sizes, and longer audit tenures are associated with increased discretionary accruals. However, non-significant p-values caution against accepting these associations at the 5% level. The coefficient of determination (R2) indicates that the chosen variables collectively explain 27.26% of earnings management, offering some explanatory power to the model. In conclusion, the study recommends listed deposit money banks to prioritize engagement with Big 4 Audit Firms and carefully consider audit fee structures. Regulatory bodies, particularly the Central Bank of Nigeria, are advised to enhance surveillance, particularly in the realm of auditor remunerations. The research underscores the need for caution in interpreting the identified associations and highlights avenues for future research, including incorporating control variables and addressing potential endogeneity concerns for a more nuanced understanding of the relationship.

Pengaruh Good Corporate Governance dan Kebijakan Hutang terhadap Manajemen Laba dengan Kinerja Keuangan sebagai Pemoderasi

This research aims to analyze the impact of good corporate governance and debt policy on earnings management practices, with financial performance as a moderator. The research method applied is an associative quantitative approach using secondary data. The population considered consists of non-cyclical companies listed on the Indonesia Stock Exchange during the period 2018-2022, totaling 113 companies. Samples were selected using purposive sampling method, with four specific criteria resulting in 32 companies as samples, yielding a total of 160 data observations. Data analysis was conducted through descriptive statistical techniques, panel data regression model estimation, classical assumption tests, hypothesis testing, and Moderated Regression Analysis (MRA) using Eviews 10 software. The research findings indicate that good corporate governance measured by the Board of Directors proxy partially significantly influences earnings management practices. However, the influence of good corporate governance measured by the Independent Commissioners proxy is not statistically significant on earnings management practices. Furthermore, debt policy also does not significantly affect earnings management practices. Additionally, it was found that financial performance does not moderate the relationship between the Board of Directors and Independent Commissioners with earnings management practices, nor does it moderate the relationship between debt policy and earnings management practices.

An empirical study of unethical earnings management behaviors in Gulf Corporation Council (GCC) listed firms

We present an empirical rationale and supporting study revealing how executives, especially in Gulf Corporate Council (GCC) listed companies, resort to unethical earnings management practices in times of financial loss and financial distress. Employing a quantitative approach, this study analyzes 120 listed companies using the Modified Jones (1995) Model to estimate earnings management as a dependent variable. Regression analysis is employed to explore the impact of independent variables. Our findings conclude that executives across six GCC countries engage in earnings management through both positive and negative discretionary accruals. Notably, the results reveal that factors such as consolidation, financial distress and performance significantly influence earnings management practices.

PENGARUH LEVERAGE DAN STRUKTUR KEPEMILIKAN TERHADAP MANAJEMEN LABA

This study aims to determine what factors influence Earnings Management by explaining empirical evidence regarding the effect of Leverage, Managerial Ownership, Institutional Ownership, and Firm Size as control variables. This study uses secondary data. The independent variables in this study are Leverage, Managerial Ownership and Institutional Ownership. The dependent variable in this study is Earnings Management. The control variable in this study is company size. The research data was obtained from annual reports published on the Indonesia Stock Exchange for 2019 – 2021. The sampling technique used was purposive sampling which obtained a total of 72 companies in mining companies listed on the Indonesia Stock Exchange in 2016 and homogeneous. This study uses multiple regression analysis method. The results of this study are (1) Leverage Has a Positive and Significant Effect on Earnings Management; (2) GCG KI does not have a positive effect on earnings management; (3) GCG KM does not have a positive effect on profit management; (4) Company Size Has a Positive and Significant Influence on Earnings Management.

The Factors that Influence Earnings Management: Evidence on Basic Materials Sector

Earnings management is an action to modify accounting records so that there is intervention in the financial statements while complying with applicable accounting standards. This study aims to determine the relationship between earnings management with tax incentives, tax avoidance, and financial distress in basic materials sector companies listed on the Indonesia Stock Exchange for the period 2016 – 2021. This research can suggest the companies or investors regarding the factors that influence earnings management practices in a company so that it can be more efficient in making business decisions in order to maintain the stability of the company. The sample selection technique in this study used purposive sampling. The resulting samples were 13 companies and 78 observational data. The analysis technique used is panel data regression using Eviews 12 software. The results show that tax incentives, tax avoidance, and financial distress simultaneously affect earnings management. Partially tax incentives have a negative influence on earnings management, while tax avoidance and financial distress have a positive influence on earnings management.

Does Debt Influence Earnings Management in Going Private Transactions in Brazil?

This paper aimed to analyze the influence of debt in earnings management of non-financial companies that were listed on the Brazilian capital market and went private by stock repurchase between 2002 and 2020. The companies that went private were matched by size and sector of activity with those that remained on the stock exchange market in the year prior to the offer announcement. Earnings management was estimated using discretionary accruals and debt was measured by Debt-to-Equity ratio and Total Debt ratio. The results suggest that companies that went public by repurchasing shares tend present negative earnings management. Also, it was found negative and significant relationship between earnings management and Debt-to-Equity ratio and company size. It is understood that the intensification of the monitoring of the managers' actions, mainly due to the publicity of the process implies the restriction of discretionary practices.

Manajemen Laba, Sales Growth, Good Corporate Governance dan Tax Avoidance

Tax avoidance practices carried out by taxpayers (companies) can cause losses to the country and can hinder national development. The research aims to obtain empirical evidence regarding the influence of earnings management, sales growth, and good corporate governance on tax avoidance. The research was conducted at basic industrial and chemical sector companies listed on the Indonesia Stock Exchange for the 2017-2021 period with a sample size of 120 observations determined using a purposive sampling technique. The data analysis technique used is panel data regression analysis with EViews 12 software. The research results show that earnings management and audit committees have a negative effect on tax avoidance and sales growth and independent commissioners have a positive effect on tax avoidance. Institutional ownership and audit quality have no effect on tax avoidance.
 Keywords: Tax Avoidance; Earnings Management; Sales Growth; Good Corporate Governance

Pengaruh Kepemilikan Institusional, Kepemilikan Managerial Dan Good Corporate Governance Terhadap Praktik Manajemen Laba Pada Perusahaan Perbankan 2017-2021

Profit is an indicator of operational performance so that business success and failure can be seen from the profits earned by the company. To attract the interest of investors and other related parties, earnings management violations were carried out in the financial statements so that the company appeared to be making profits that did not match reality. To prevent this, it is necessary to analyze the factors that influence earnings management. This study aims to analyze the effect of Institutional Ownership, Managerial Ownership and Good Corporate Governance on Profit Management in Banking Companies in 2017-2021. This type of research is explanatory research with secondary data sources from the official website of the Indonesian Stock Exchange. The research population was 41 banking companies listed on the Indonesia Stock Exchange in 2017-2021 with a sample size of 26 companies according to the criteria set. Analysis of research data through the PLS program. The research results prove that Institutional Ownership and Managerial Ownership have a significant negative effect on earnings management, Except for Good Corporate Governance. So to reduce earnings management, companies need to pay attention to Institutional Ownership, Managerial Ownership and Good Corporate Governance in research.

Capital structure and practices of accrual-based earnings management among non-financial Vietnamese listed firms

This paper’s primary goal is to examine the influence of a firm’s capital structures on practices of accrual-based earnings management by doing empirical research covering 51 non-financial Vietnamese listed companies during a period from 2013 to 2022. To estimate accrual-based earnings management practices, the modified Dechow and Dichev (2002) model was mobilized. Then, a regression between earnings management estimated values based on accruals and a group of capital structure variables and control variables that are hypothesized to influence earnings management practices is performed. The feasible generalized least square model is used to address econometric issues. Empirical results reveal that activities for managing accrual-based earnings indicate a considerable adverse influence from institutional ownership. However, other hypothesized variables that are management ownership, ownership concentration, foreign ownership, and leverage do not have a determinant sign as expected. ROA, one of five control factors, has a favorable impact on accrual-based earnings management practices, whereas company size has a negative impact. The study provides useful information to investors and stakeholders for their making investment decisions in Vietnam. The empirical findings are also based for recommendations to control earnings management practices at Vietnamese listed enterprises to enhance accounting information quality, thus contributing to the sustainable development of the Vietnam Stock Exchange.

PENGARUH ASET PAJAK TANGGUHAN, PERENCANAAN PAJAK DAN ARUS KAS BEBAS TERHADAP MANAJEMEN LABA

This study aims to examine the effect of tax-deferred assets, tax planning and free cash flow on earnings management. The population in this study are companies in the property & real estate sector which are listed on the Indonesia Stock Exchange for the 2017-2021 period. The method of determining the sample using a purposive sampling method, with several predetermined criteria, there are 8 companies with observations for 5 years, so that the total sample is 40 financial report data. The analytical method used is multiple linear regression analysis with the eviews 9 program. The results of the regression test in this study prove that deferred tax assets, tax planning and free cash flow simultaneously influence earnings management. Meanwhile, partially free cash flow has a negative effect on earnings management, while deferred tax assets and tax planning have no effect on earnings management.

Unraveling market mysteries: a comprehensive review of financial anomalies and puzzles

This comprehensive literature review consolidates various market anomalies and puzzles, providing an aggregated perspective to understand these complex dynamics that challenge the traditional Efficient Market Hypothesis. We examined numerous academic works to reveal insights into long-term return irregularities, earnings management influence on equity offerings, and information uncertainty’s impact on stock returns. The review delves into unique phenomena like persistent mutual fund performance, the day-of-the-week returns, the January effect, weather-induced mood shifts on the market, and the dynamics of multiple anomalies. International asset pricing and weekend anomalies were also discussed, with a particular focus on cryptocurrency efficiency. Incorporating behavioral finance perspectives, we explored social transmission bias, emotional finance, biased beliefs, investor optimism, sentiment, and global market inefficiencies. The influence of unique events and seasonal factors, such as the Super Bowl, daylight saving time, and the Halloween effect, were also analyzed. The review concludes by highlighting the evolving landscape of market anomalies, discussing ma- chine learning approaches to anomaly research, investor behavior challenges, and the disappearing anomalies in country and industry returns. It sets the groundwork for holistic comprehension of market anomalies, suggesting future research directions such as exploring new data sources, comprehensive theoretical modeling, and the role of technology, market regulations, and environmental changes on market anomalies.

Impact of dividend policy on earnings management and the moderating effect of the board of directors and the audit committees: The French case

Research Question: To what extent can governance mechanisms (audit committee and board of directors) affect the relationship between dividend policy and earnings management? Motivation: The majority of the literature has showed that dividend policy can influence earnings management. However, the empirical results did not lead to the same results. Our study seeks to fill this gap by examining whether this impact can vary by taking into account certain moderating variables such as: the size of the board of directors, the number of board meetings, the independence and expertise of the members of the audit committees. Idea: This study examines the moderating effect of certain variables related to the effectiveness of the board of directors and the audit committee on the impact of the dividend policy on earnings management. Data: The authors selected French non-financial companies listed on the CAC All Tradable index during the 2008-2015 period. Tools: To test study’s hypotheses, the authors applied linear regression with a panel data using the datastream database. Generalized least squares method is used to estimate the models. Findings: The results of this study show that the effect of the dividend policy on earnings management is more favorable in the case of companies where the board of directors is large. Contribution: This study shows that dividend policy constitutes an objective of earnings management especially in the companies with boards made up of a large number of directors. Investors and academics have an interest in better understanding the concepts: dividend policy and earnings management because the debates relating to these two variables have always been the subject of controversy. Thus, they can refer to corporate dividend policy as a mechanism for assessing the authenticity of corporate financial reports.

Earnings Management Factors In The Consumer Goods Industry During The Covid-19 Pandemic

The global proliferation of the Covid-19 pandemic has adversely impacted public health, society, and the economy. To face the pandemic, managers are frequently required to make highly complicated decisions about financial reports. Earnings management occurs when managers modify financial statements for the advantage of stakeholders by evaluating opportunities in certain business activities. This paper investigates the impact of audit opinion and tax incentives on earnings management and leverage as a moderating variable among consumer goods manufacturing companies. A purposive sampling technique was performed to select 15 manufacturers in the consumer goods industry subsector listed on the Indonesia Stock Exchange between 2019 and 2021, which matched the research criteria. This study's findings indicate that audit opinion and tax incentives influence earnings management among consumer goods companies in the COVID-19 pandemic era. Moreover, leverage was a moderating variable for audit opinion and earnings management, but it did not moderate the effect of tax incentives on earnings management.

Earnings Management as an Finance Strategy for Company Image

Earnings management is a management action performed when a company is experiencing financial distress and during an IPO. Earnings management is carried out so that financial reports always appear to have a positive trend and good prospects. This study aims to empirically examine the various factors that influence earnings management actions by management. This research focuses on financial sector companies listed on the IDX from 2018 to 2022. The sampling method used is purposive sampling with 90 companies and 450 units of analysis (five years). The selected data analysis to test the research hypothesis is multiple linear regression. The research results show that tax planning can be an early warning of earnings management. Audit quality has a positive effect on earnings management. Accounting conservatism and CSR disclosure by the company is a signal that the company does not practice earnings management. Deferred tax expense and institutional ownership variables cannot be used as predictors for detecting earnings management. Keywords: Tax Planning, CSRD, Earnings Management

Proportional appropriation systems and financial statement quality in municipally owned entities: empirical evidence from Italy

PurposeThis paper aims to examine how proportional appropriation systems affect the quality of financial reporting in entities controlled by local governments.Design/methodology/approachThe authors examine this issue using the setting of Italian municipally owned entities (MOEs) following the implementation of a new accounting regulation that limits the spending power of the participating municipality when the owned entity reports losses. The authors apply Benford's law on net income figures using the Chi-square and Z-tests on the adjusted version of the Mean Absolute Deviation (MAD) criterion to spot any sign of low data quality. The sample, which consists of 2,120 MOEs, covers the years 2010–2019 and is evenly divided into the periods pre- and post-policy introduction.FindingsWidespread data anomalies were detected following the introduction of the new regulation for MOEs controlled by local governments. Evidence is stronger for entities owned entirely by municipalities. The results suggest that the extent of data manipulation grows as the municipality's ownership stake increases, consistent with the hypothesis that a decrease in spending power through the appropriation of financial resources affects earnings management practices in municipally controlled entities.Practical implicationsThis paper sheds light on government-based accounting policies by documenting evidence of somewhat inefficient responses by those responsible for the preparation of financial statements on behalf of municipally owned entities, and, accordingly, insights are provided to help review these policies so as to forestall even indirectly detrimental repercussions on public services.Originality/valueThis paper extends prior research in public-sector earnings management by being the first to test whether MOEs manipulate their earnings as a consequence of participating municipalities' reduced spending capability. Understanding factors influencing earnings management practices driven by governments, other than political incentives, is still an open issue.

BOARD CHARACTERISTICS AND EARNINGS MANAGEMENT OF LISTED CONSUMER GOODS FIRMS IN NIGERIA

Corporate governance mechanisms have continued to strengthen the operations and activities of corporate entities in Nigeria. Board characteristics and earnings management have attracted many scholars trying to establish relevant relationship that will assist policy makers and regulatory agencies in facilitating good corporate governance. This study examines the impact of board characteristics on earnings management of listed consumer goods firms in Nigeria. The Agency Theory was used to underpin the study. Board characteristics as the independent variable was proxied using board independence, board meetings, board gender diversity and board expertise while earnings management as the dependent variable was measured using the Modifies Jones Model. The panel data multiple regression was used on data extracted from annual reports of sixteen listed consumer goods firms from 2011 to 2020. The study found that, board gender diversity and board expertise negatively and significantly influence earnings management while board independence and board meetings have no significant influence on listed consumer goods firms in Nigeria. The study therefore recommends that, regulatory agencies and policy makers should encourage listed consumer goods firms in Nigeria to increase diversity in boards and expertise as this will minimize earnings management activities by management.