This study analyses the accrual-based and cash-based earnings relationship by stressing on investors’ assessments of the information content which are price-voluntary into earnings components in predicting non- financial firms listed at Pakistan Stock Exchange future’s earning. There are 100 non-financial corporations in total, from a range of 12 distinct types of industry; and the study period covers 14 years have led to a complete sample size of 1,372 firms. The sample companies were selected based up on their market capitalizations. The analysis adopts Mishkin (1983) as the model and with hedge-based portfolio tests, we examine the persistence of current earnings components, namely accruals and cash flows. It also provides an explanation of how accruals and cash flows in current earnings affect the forecast of future earnings. The results imply that current earnings are both persistent and an adjustor of the future period’s earnings, persistence in earnings is stronger with the use of cash flows rather than accruals. These findings are at odds with those of Sloan (1996) and imply that the market is rational in undervaluing accruals and cash flows as a part of earnings. The results from the hedge-based test provide support to those of the Mishkin test in showing that it is not possible for the market to generate abnormal returns by forming arbitrage portfolios. The findings suggest that the accruals anomaly is not present in the Pakistan Stock Exchange. These results are relevant for those analysts and fund managers who want to generate abnormal returns through the formation of arbitrage portfolios.

The banking industry is inherently vulnerable to financial manipulation due to its high leverage structure, complex transactions, and direct access to liquid financial assets. Profit management can be viewed as the right of managers to establish certain accounting policies from an academic perspective; however, it is often viewed as fraudulent behavior by practitioners. This study aims to examine how leverage, the risk management committee (RMC), and earnings persistence affect real earnings management (REM). Using a quantitative approach and purposive sampling, the study analyzes 47 banking companies, resulting in 198 usable observations after outlier removal. The results show that leverage and the risk management committee have a significant effect on real earnings management, with significance values of 0.014 (< 0.05) and 0.042 (< 0.05), respectively, while earnings persistence (sig. = 0.186) does not have a significant effect. Simultaneous testing also confirms a significant joint influence (sig. = 0.008), although the adjusted R-squared value is only 0.044 (4.4%), indicating that the independent variables collectively explain a limited portion of real earnings management. Future research is recommended to incorporate additional independent variables to better explain real earnings management

This study was conducted to analyze the ability of managerial ownership, audit fees, operating cycle, and firm size as control variable to predict earnings persistence in noncyclical and cyclical companies for the 2019-2021 period. Using a purposive sampling method, 18 noncyclical companies and 12 cyclical companies were selected. The results showed that in noncyclical companies, managerial ownership, audit fees, and operating cycle could not predict earnings persistence. However, in the cyclical sector, the variation in earnings persistence was determined by managerial ownership, audit fees, and operating cycle by 29.2%. Partially, for the cyclical sector, the results of this study indicate that the higher the managerial ownership, the higher the earnings persistence, indicating that high managerial ownership can minimize agency conflicts and increase earnings persistence. Meanwhile, for audit fees, the higher the amount, the lower the earnings persistence. This result suggests that the more professional the auditor, the less likely the auditor is to compromise financial reports that do not comply with applicable accounting standards. This leads to a tendency for reduced earnings persistence in the audit reports issued. The operating cycle's inability to predict earnings persistence might be due to the operating cycle being more closely related to the company's cash flow, while earnings persistence is related to accrual-based accounting.

This article reexamines dividend policy as an informational and disciplinary mechanism, articulating three research traditions: (i) the irrelevance view under perfect markets and its limits (Miller & Modigliani, 1961); (ii) signaling in a context of information asymmetry (Bhattacharya, 1979; Miller & Rock, 1985); and (iii) the agency-cost and behavioral finance perspective (Jensen, 1986; Baker & Wurgler, 2016). An integrative three-block model is proposed—earnings quality and persistence; financial discipline and capital structure; market expectations and reference points—to interpret distribution decisions as messages about cash-flow stability, investment discipline, and organizational maturity. The text combines theoretical synthesis and practical implications for boards of directors and institutional investors, detailing operational metrics (e.g., dividend coverage by cash flow, abnormal accruals, and earnings persistence) and boundary conditions (life-cycle stage, intensity in intangibles, and substitution by share repurchases). The article is conceptual (without proprietary data) and dialogues with international and Brazilian evidence up to 2022, outlining a testable empirical agenda in emerging markets. It concludes that consistent payout policies, communicated with transparency, reduce uncertainty, improve governance, and, in environments with frictions, influence the cost of capital and risk perception.

The earnings response coefficient (ERC) reflects how the market reacts to a company’s earnings announcements. Several factors, such as firm size, leverage, and earnings persistence, are often associated with ERC, as they are believed to influence investors’ perceptions of earnings quality. However, the relationship between these variables and ERC remains debated. Wulandari and Herkulanus (2015) state that ERC can serve as an indicator of earnings quality, while Ahabba and Sebrina (2020) note that its relationship with financial indicators varies across industries. This study investigates the impact of firm size, leverage, and earnings persistence on ERC in manufacturing firms listed on the Indonesia Stock Exchange (IDX) from 2018 to 2021. A purposive sampling method is applied, producing a final sample of 47 firms. The data is analyzed using EViews 12, applying classical assumption testing, panel data regression, and hypothesis testing. The findings reveal that firm size, leverage, and earnings persistence do not significantly affect ERC. This supports the findings of Dewi and Putra (2022), who reported similar outcomes in the Indonesian context. These results suggest that investors may consider other variables when responding to earnings announcements. Future research should expand the sample, observation period, and scope of variables.

Purpose The purpose of this study is to investigate the influence of the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) standards on income smoothing perspective in the Islamic financial institutions (IFIs) operating in the Middle East and North Africa (MENA) countries, with a comparative analysis of the outcomes under AAOIFI standards versus those under International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). Design/methodology/approach The authors used the General Least Square regression on a panel data of 35 IFIs from six countries from 2013 to 2018. Data was collected from the BankScope database, annual reports of the selected IFIs and the World Bank databases. Findings The authors find a significant positive connection between intentional income smoothing and the levels of earning persistence and cash-flow predictability. The implementation of the AAOIFI accounting standards has a detrimental impact on intentional income smoothing and persistence of earnings. The level of income smoothing efficiency is lower among IFIs that adhered to the Financial Accounting Standards (FASs) issued by AAOIFI in contrast to those that adopt IFRSs issued by the IASB. Practical implications The results of this study carry significant implications for reporting practices, reporting standards and trust toward IFIs operating globally. This research offers interesting avenues for IFI managers who try to attract more investors especially when AAOIFI accounting and auditing standards are a signal of higher earnings quality. The results can be expedient guidance to the external auditor concerning the choice of the auditing standards of the IFIs. Originality/value This is an attempt in comparing AAOIFI with IFRS standards and their impact on income smoothing efficiency. The results accentuate the importance of establishing specific standards to improve the pertinence of financial reports disclosed by the IFIs. The authors highlight that IFRSs are insufficient to guide IFI operations and AAOIFI accounting standards are needed to cater to the uniqueness of IFIs.

This study aims to analyze the impact of auditor selection on the quality of financial statements by considering factors such as auditor independence, competence, and reputation as key determinants of transparency and accountability in financial reporting. Using a quantitative approach with descriptive and causal-comparative methods, the study analyzes secondary data from companies listed on the Indonesia Stock Exchange (IDX). The sample was selected through purposive sampling based on criteria such as completeness of financial reports and the presence of audited statements. The results reveal that auditor selection whether from Big Four or non-Big Four firms does not significantly affect the quality of financial statements. Instead, total accruals show a significant negative effect, indicating that internal financial practices play a more substantial role than auditor type in determining financial reporting quality. Despite this, prior literature emphasizes that auditor quality, industry specialization, and experience still contribute indirectly by strengthening oversight. Therefore, future research should explore additional variables such as auditor tenure, audit committee effectiveness, and corporate governance as mediators or moderators. Expanding the sample and observation period, as well as applying multi-dimensional measures of financial statement quality, such as earnings persistence and conservatism, can improve the robustness and generalizability of findings.

This study aims to examine the effect of book tax differences and company size on profit persistence in food and beverage companies listed on the IDX in 2018-2022. This research is a type of quantitative research and uses secondary data. Determination of the sample using purposive sampling method technique with a total of 18 food and beverage companies as research samples. The research method uses multiple linear regression analysis using the IBM SPSS version 26 analysis tool. The results of this study conclude that book tax differences have a significant effect on earnings persistence and company size has no significant effect on earnings persistence.

Purpose This study aims to examine whether Benevolent directors on the board influence corporate earnings quality (EQ). The authors further investigate the roles of chief executive officer (CEO) benevolence, gender and corporate governance mechanisms in the association between board benevolence and EQ. Design/methodology/approach Drawing from upper-echelon and ethical leadership theoretical perspectives, the study hypothesizes a positive association between board benevolence and earnings persistence (EP). Director benevolence is proxied by their involvement in not-for-profit leadership positions, simultaneously to corporate directorships. EQ is proxied through EP, which is the persistence of earnings and cash flows from current to future periods. Findings The analysis reveals a positive association between board benevolence and EP using a sample of Australian capital market firms from 2010 to 2019. Second, Benevolent CEOs, women CEOs and more independent directors on boards and audit committees strengthen the board benevolence–EP association. The findings are robust to entropy balancing, residual inclusion of board benevolence and instrumental variable regressions. Research limitations/implications The authors make a novel contribution to the financial reporting literature by documenting that the personal moral characteristics of corporate leaders, particularly those of the board of directors, significantly influence EQ. Originality/value The originality of the paper lies in viewing board composition through an understudied yet instrumental perspective: board benevolence. The findings will be insightful for policymakers seeking to enhance the quality of information in capital markets and for investors evaluating the financial information of firms.

This study examines the relationship between tax avoidance and earnings persistence among Indonesian public listed firms. We utilized a pooled sample regression of 869 firm year observations from 2019-2021. We documented that tax avoidance practices significantly reduce earnings persistence, and better ownership control by foreign ownership amplifies this finding. Financial adherence and compliances such as better audit quality also play a significant role in increasing earnings persistence among Indonesian public listed firms. However, IFRS adherence is insignificant. The novelty of this research is to provide insightful findings pertaining to tax and earnings persistence behavior in Indonesia by integrating non-financial variables such as government and foreign ownership. Despite that, a limitation of this research may include not studying the Covid pre- and post- conditions of the Indonesian financial landscape in its relation to tax and earnings persistence. The practical implication of this research is on-point, which is to provide recommendations to the Indonesian government to strengthen control over tax avoidance and evasion among Indonesian firms, which may impact the social welfare of Indonesia as taxes are supposed to or ideally be used for building the infrastructure of the country. JEL Codes: H26, G32, M41 Keywords: Earnings Persistence, Tax Avoidance, Indonesian Public Listed Firms, Ownerships, IFRS Adherence, Audit Quality

Purpose The study examines how the recent adoption of International Financial Reporting Standards (IFRS) – converged “Ind-AS” accounting standards influences financial reporting quality (FRQ) in India, an emerging market. It is motivated by India’s momentum in the International Accounting Standard Board (IASB)’s initiative of the global endorsement of IFRS. Design/methodology/approach FRQ is captured with accounting- and market-based metrics. Panel data regression models are employed to capture FRQ. Two-stage least squares regression is used to address the endogeneity. The study considers a consistent sample of 2,320 company-year observations from the National Stock Exchange (NSE)-listed companies. The observations are classified into two periods: (1) the pre-Ind-AS adoption period from April 1, 2012 to March 31, 2016 and (2) the post-Ind-AS adoption period from April 1, 2016 to March 31, 2020. Findings The study shows a major improvement in FRQ after Ind-AS implementation using univariate and multivariate analyses. Specifically, Ind-AS-compliant companies exhibit less earnings smoothness, less benchmark beating, higher earnings persistence, more timely loss recognition, less accrual-based earnings management (AEM), higher earnings predictability, higher value relevance\\ and higher earnings timeliness. Overall, the arguments of agency, stakeholder and institutional theories support the results. Practical implications Following the implementation of Ind-AS, the accounting standard-setters, policymakers and regulators need to conduct regular enforcement reviews and impose stricter penalties for noncompliance with Ind-AS in order to improve FRQ and maintain stakeholders’ trust in financial reporting. They should also consider strengthening the legal and institutional frameworks to complement the Ind-AS adoption. Originality/value To the best of the authors’ knowledge, this is the first study that investigates the impact of IFRS-converged Ind-AS on accounting-based and market-based FRQ metrics using longer timeframe in the emerging economy of India. Using agency, stakeholder and institutional theories, this study provides an additional contribution to the consideration concerning FRQ based on IFRS accounting standards in India.

Profit is a crucial factor for investors when making investment decisions. It is important for a company to have high-quality or persistent earnings, as these can indicate future profitability. This study aims to analyze the influence of firm size, debt level, and cash flow volatility on earnings persistence, with managerial ownership serving as a moderating variable. The population used in this study consists of 10 banking companies included in the PRIMBANK10 index and listed on the Indonesia Stock Exchange (IDX) during the 2021–2024 period. The entire population was used as the sample, resulting in 40 data observations. This research employs a quantitative approach. The tests used include panel data regression analysis and moderated regression analysis, conducted using EViews 12. The results of the study show that firm size has a significant effect on earnings persistence. Meanwhile, debt level and cash flow volatility do not affect earnings persistence, and managerial ownership as a moderating variable does not strengthen the relationship between firm size, debt level, and cash flow volatility on earnings persistence.

This study looks at the effect of accounting flexibility on earnings quality in public companies listed on the Indonesia Stock Exchange during the period 2016 to 2019. This study uses two models to measure earnings quality, namely ERC and earnings persistence. The results showed that accounting flexibility, namely the limitations of companies to carry out accrual earnings management, can reduce earnings quality, as shown by the abnormal accrual model which shows a significant positive coefficient direction, and for the ERC model and earnings persistence which shows a negative and significant coefficient direction. The higher the level of accrual earnings management up to a certain limit point, the more incentive company managers will have to increase accounting flexibility and switch to real earnings management (Xu and Yang, 2013; Masri, 2018). Theoretical contributions show that the higher the level of accrual earnings management up to a certain limit point, the more incentive company managers will have to increase accounting flexibility and switch to real earnings management (Xu and Yang, 2013; Masri, 2018; Purba, Surya, Joshi & Tiagy, 2023). The Implications of this research show that accounting flexibility is carried out when abnormal accruals reach the highest limit point reflected in accounting choices in net operating assets in the balance sheet, so in this case it results in a low level of earnings informativeness and earnings persistence.

This study examines how operating cash flow, liquidity and company size influence the persistence of profits analyzed for mining companies listed on the Indonesia Stock Exchange during 2021 to 2023, by considering the book tax difference with the position of the moderating variable. The quality of earnings is determined not only by the amount of high or low profits, but also by the stability of these profits over a certain period of time. Shareholders' expectations of sustainable profits are based on their ability to provide a more reliable estimate of profit performance in the next period. The purposive sampling method was used to obtain a sample of 32 entities. Secondary data is used as study material, and collection is carried out through documentation. Eviews 12 is software that functions to carry out analysis of existing data. These findings show that operating cash flow and liquidity do not contribute to earnings persistence, while company size shows a positive and significant influence on earnings persistence. Book tax difference is proven to be only relevant as a moderating variable in the relationship between company size and profit persistence, while in the relationship between operating cash flow and liquidity, book tax difference does not play a role in the moderator position.

In this regard the veracity of the corporate engagement in reporting earnings is of core interest in financial research especially in developing economies where regulation, disciplinary and governance infrastructure remains variable. This paper reconsiders the applicability of the four fundamental financial determinants, that is, the capital structure, earnings growth, firm size, and earnings persistence as a determinant of earnings quality in Indonesia in industrial sector. These variables are generally addressed in the available extents of literature as universally credible predictors; however, the institutions and the behavioural issues that define firms within a structurally fissured market place are rarely considerations, and few theories can be applied that are held to be reliably predictive. This study, using a regression model based on agency theory and signaling theory, and panel data collected on industrial firms which were listed in the Indonesia stock exchange during the period of 2019 and 2023; discovers that capital structure poses a rather influential influence positively on the earnings quality of firms. This is the result of creditor management encouraging reporting discipline in situations where internal governance is low. Conversely, earnings growth and firm size are not related closely with earnings quality, which means that the market is no longer using scale itself or expansion as a valid proxy of credibility. Even more urgently, the persistence of earnings is much more harmful on the scale, showing how too steady earnings could speak about manipulation instead of actual financial might.

This study aims to determine the effect of growth opportunity, earnings persistence, and prudence accounting on earnings response coefficient, with systematic risk as a moderator in manufacturing companies listed on the IDX for the period 2020 - 2024. The research method used is descriptive quantitative with secondary data in the form of sustainability reports and financial reports from 16 companies taken by purposive sampling from a population of 196 companies. The research method used in this analysis is the random effect model. The results of the analysis show that: 1). growth opportunity has a significant positive effect on earnings response coefficient; 2). Earnings persistence has a significant negative effect on earnings response coefficient; 3). Accounting prudence has a significant positive effect on earnings response coefficient; 4). Systematic risk can weaken the effect of growth opportunity and earnings persistence on earnings response coefficient; 5). Systematic risk can strengthen the effect of prudence accounting on earnings response coefficient.

This study investigates why firms with large book–tax differences (BTDs) exhibit lower earnings persistence, particularly during periods of revenue declines. While prior literature has linked BTDs, especially large positive BTDs (LPBTDs), to earnings management, we propose an alternative explanation rooted in operational disruptions. Using a large panel of U.S. firms from 1995 to 2016, we examine whether short-term earnings persistence is affected by sales trends and the direction of BTDs. Our findings reveal that both large positive and large negative BTDs are significantly associated with reduced earnings persistence when sales decline. The effect is pronounced in both accrual and cash flow components of earnings. We develop and test a framework based on “operations theory,” which attributes this reduction to real business shocks, such as asset write-downs, facility closures, and reserve adjustments, that arise during sales decline periods. These results highlight the importance of distinguishing operationally driven BTDs from those arising through discretionary accruals. Our findings have implications for investors, regulators, and researchers seeking to interpret BTDs more accurately in volatile economic environments.

Earning response coefficient (ERC) is a measure of how much abnormal stock return will be obtained by responding to unexpected earnings as profit information published by the company. The purpose of this study was to test and analyze the effect of earnings persistence, leverage, profitability and firm size on the earning response coefficient (ERC) in consumer goods sector companies consisting of primary and non-primary consumer goods companies listed on the Indonesia Stock Exchange for the 2021-2023 period. The sampling technique in this study used purposive sampling technique. A total of 82 companies have met the requirements as research objects so that the total sample used is 246 samples. The analysis method used in this study is the multiple linear regression analysis method. The results of the study show that the variables that affect the earning response coefficient are earning persistence. While leverage, profitability and firm size do not affect the earning response coefficient.

This research aims to examine the direct impact of leverage, asset growth, and dividend policy on earnings quality. The study also aims to investigate the moderating effect of earnings persistence on the influence of leverage, asset growth, and dividend policy on earnings quality in companies within the oil, gas, and coal sub-sector listed on the Indonesia Stock Exchange from 2019 to 2023. The sampling method used is purposive sampling based on specific criteria. From the criteria set, a sample of 20 companies was obtained. The analysis method used includes selecting the best model, classical assumption tests (data quality tests), and hypothesis testing. The results of this study indicate that the dividend policy variable has a positive direct effect on earnings quality, and the moderating variable of earnings persistence strengthens the effect of dividend policy on earnings quality.

This study is to determine the effect of Earnings Persistence, Book Tax Difference, Investment Opportunity Set and Capital Structure on Earnings Response Coefficient and Accounting Conservatism as a moderating variable. This study uses a quantitative approach, the research sample amounted to 13 companies. The sampling technique used is purposive sampling. The results of hypothesis research simultaneously show that the Earnings Persistence and Investment Opportunity Set variables have a significant effect on the Earnings Response Coefficient (ERC). Partial hypothesis research results Earnings Persistence and Investment Opportunity Set have a positive and significant effect on Earnings Response Coefficient. While Book Tax Difference and Capital Structure have no significant effect on Earnings Response Coefficient. Accounting Conservatism moderates Earnings Persistence and Investment Opportunity Set on Earnings Response Coefficient while Accounting Conservatism cannot moderate the effect of Book Tax Difference and Capital Structure on Earnings Response Coefficient