Accruals management

Creative accounting refers to the use of deceptive, though not necessarily illegal, accounting techniques in order to obtain a number of financial and tax benefits (primarily through earnings management) which help companies (indicatively) adapt to growing competition, enter new markets, draw in investors, and so on. In recent years, this practice has drawn the attention of the international academic community, market professionals, and investors. It is evident that the accuracy and dependability of the financial

The study investigates the existence of earnings management practices by companies listed in the KLSE. Prior studies suggest that managers manage earnings to avoid reporting losses and earnings decreases. This study tests the effects of size and code of corporate ...

The study investigates the existence of earnings management practices by companies listed in the KLSE. Prior studies suggest that managers manage earnings to avoid reporting losses and earnings decreases. This study tests the effects of size and code of corporate ...

İÇ KURUMSAL YÖNETİM MEKANİZMALARININ TÜRKİYE’DEKİ KAZANÇ YÖNETİMİ UYGULAMALARINA ETKİSİ Vekâlet teorisine göre işletmelerde karar merciinde olanlar verdikleri kararların sonuçlarını kendi zenginliklerinde değişme şeklinde katlanmadıklarında ve bu sonuçlar daha çok karar verenleri değil işletme ortaklarını etkilediğinde, yöneticiler ve işletme ortakları (hissedarlar) arasında bazı menfaat çatışmaları oluşur. Kazanç yönetimi karar verme yetkisinde olan üst düzey yöneticilerin kendi çıkarlarını gmek amacıyla kullandıkları bir araçtır. Buna karşın Kurumsal Yönetim birçok araştırmacının ilgisini çeken, hissedarların menfaatlerini korumaya, vekâlet maliyetlerini düşürmeye ve temsilci-temsil edilen çıkar çatışmalarını azaltmaya yönelik olan bir mekanizmadır. Bu çalışmanın temel amacı iç kurumsal yönetim mekanizmalarının; bunlar yönetim kurulu, denetim komitesi, iç denetim fonksiyonu ve bağımsız denetim; Türkiye’deki kazanç yönetimi uygulamalarına etkisini ölçmektir. Çalışmada belirlenen ar...

In this study, economic value added and created shareholder value were calculated based on accounting figures and their difference was determined. Then, the reason of this difference has been analyzed using earnings management and corporate governance structure. Earnings management was calculated utilizing discretionary accrual accounting based on adjusted Jones model between 2004 and 2010; executive director ratio, non-executive director ratio, and ownership concentration in companies were examined concerning corporate governance variables. In this regard, regression statistical methods and T, F, and Pearson tests were used for assumptions examination. Selected sample was from accepted companies in Tehran stock exchange. The results showed that difference between economic value added and created shareholder value is meaningful. Examining reasons of the difference indicated that the difference has a meaningful relation with index of discretionary accrual accounting in companies. In addition, relation of executive director ratio and ownership concentration in companies with calculated difference was approved (it was positive) but relation of non-executive director ratio with the difference was not approved (it was negative). Moreover, effect of financial leverage, company size, and their type of ownership on the difference was approved.

Purpose-Aims to investigate the extent of the effectiveness of monitoring functions of board of directors, audit committee and concentrated ownership in reducing earnings management among 97 firms listed on the Main Board of Bursa Malaysia over the period 2002-2003. Design/methodology/approach-The current study employs the cross-sectional modified version of Jones, where abnormal working capital accruals are used as proxy for earnings management. Findings-The study reveals that earnings management is positively related to the size of the board of directors. This supports the view that larger boards appear to be ineffective in their oversight duties relative to smaller boards. A possible explanation for the insignificant relationship between other corporate governance mechanisms (independence of board and audit committee) and earnings management is that the board of directors is seen as ineffective in discharging their monitoring duties due to management dominance over board matters. The apparent reason for this phenomenon is attributed to the board of directors' relative lack of knowledge in company's affairs. The study also found that ethnicity (race) has no effect in mitigating earnings management, possibly due to the more individualistic behaviour of the Bumiputra directors. The modernisation of Malaysia and also the increase in Bumiputra ownership of national wealth may have caused the Malays to be more individualistic, similar to their Chinese counterpart. Originality/value-Since, there are relatively few studies conducted in this area specifically among Malaysian firms, this study will broaden the scope by providing empirical evidence of the relationship between various corporate governance characteristics, cultural factors and earnings management.

PurposeAims to investigate the extent of the effectiveness of monitoring functions of board of directors, audit committee and concentrated ownership in reducing earnings management among 97 firms listed on the Main Board of Bursa Malaysia over the period 2002‐2003.Design/methodology/approachThe current study employs the cross‐sectional modified version of Jones, where abnormal working capital accruals are used as proxy for earnings management.FindingsThe study reveals that earnings management is positively related to the size of the board of directors. This supports the view that larger boards appear to be ineffective in their oversight duties relative to smaller boards. A possible explanation for the insignificant relationship between other corporate governance mechanisms (independence of board and audit committee) and earnings management is that the board of directors is seen as ineffective in discharging their monitoring duties due to management dominance over board matters. The ...

Diversos são os estudos empíricos que investigaram os motivos específicos das escolhas contabilísticas, adoptadas pelas empresas no sentido de adequarem os resultados obtidos aos interesses da gestão. Muitos desses focalizaram-se em métodos de custeio de saída ...

This paper examines the roles of independent members on the board, chief executive officer who also serves as a chairman of the company, board competency and management's share ownership on earnings management practices. Different from prior research, it also investigates whether independent board competency (an interaction of independence and competency) and independent board share ownership (an interaction of independence and management ownership) would lead to better monitoring over earnings management. It also examines whether board competency and share ownership could compensate the missing role of monitoring when CEO duality exists. The results indicate that excessive shareholding beyond 25% by managers may induce managers to manage earnings, and a combined chairman-CEO roles (CEO duality) does not influence the practice of earning management in Malaysian firms. The results also indicate that the minimum composition of one-third independent director, as suggested by the Code of Corporate Governance in Malaysia is not adequate to monitor the management from earnings management practices.

This paper examines the characteristics of the audit committee towards performance before and after the revised code of corporate governance in October 2007.The review of the code is to improve and strengthen the quality, and the effectiveness of the board and audit co mmittee in the public listed company. In this study, we focus on the Government Linked Co mpanies (GLCs) to look at the reinforcement of the rev ised corporate governance 2007 among the GLCs as past study has shown puzzling results whether GLCs have fulfilled the requirements by the Malaysia Code of Corporate Governance as reported in the Securities Co mmission in 2007. The finding showsthat there is an imp rovement in the corporate governance practice specifically in the characteristics of the audit committee at the firm and itsinfluence to improve the performance of the firm among the GLCs.

This paper examines the characteristics of the audit committee towards performance before and after the revised code of corporate governance in October 2007.The review of the code is to improve and strengthen the quality, and the effectiveness of the board and audit co mmittee in the public listed company. In this study, we focus on the Government Linked Co mpanies (GLCs) to look at the reinforcement of the rev ised corporate governance 2007 among the GLCs as past study has shown puzzling results whether GLCs have fulfilled the requirements by the Malaysia Code of Corporate Governance as reported in the Securities Co mmission in 2007. The finding showsthat there is an imp rovement in the corporate governance practice specifically in the characteristics of the audit committee at the firm and itsinfluence to improve the performance of the firm among the GLCs.

The research sought to understand whether board selection yields diversity on the board of directors and whether diversity improves performance of boards. The collapse of companies in Zimbabwe and globally is alarming, yet the companies are directed and controlled by nonexecutive directors who monitor and oversee the performance of management. The research was qualitative and rooted in the interpretive paradigm. Semi-structured interviews and social media were used to gather data. Purposive and snowball sampling were used to select respondents. Data was analysed using NVivo 10. Findings of the research were that diversity of the board comes in the form of skills, education, experience, gender mix and backgrounds. Two three year terms would bring enough diversity beyond which a board member would not contribute meaningfully. Interlocking directorships breed diversity up to a maximum of three boards. Board size was observed to bring knowledge, skills, resources, velocity of processing board issues and a fair representation of sectors of the economy. Recommendations of the study are that: boards should have a gender balance so that companies tap from capabilities of © Sifile, Susela, Chavunduka & Bhebhe Licensed under Creative Common Page 482 both genders. Appointments to boards should be based on skills and experience. Board members should not sit on more than two committees. Boards should have a reasonable balance of male and female non-executives.

While studies internationally have found an association between earnings management and the firm’s future performance, there is limited literature concerning Indian firms. Prior research in the Indian context has revealed the existence of opportunistic accruals management. However, its impact on a firm’s future performance remains unexplored. Thus, this study examines the impact of accrual-based earnings management on future performance among listed non-financial Indian firms. This study estimates accruals management proxies for 2006-2017 using the widely accepted modified-Jones model of discretionary accruals. Firm performance is measured using ROA, ROE, and PE ratio. This study uses a one-step System Generalised Method of Moments (GMM) to address the problem of endogeneity in the dynamic panel model. The result from the estimator indicates that discretionary accruals have a negative impact on accounting-based performance measures (ROA and ROE) and a positive impact on the market-b...

São dois os objetivos da presente dissertação.Primeiro, define-se o âmbito do conceito de contabilidade criativa e seu impacto nas demostrações financeiras e na tomada de decisões por parte dos seus utilizadores. A contabilidade criativa verifica-se quando existe o aproveitamento da flexibilidade existente nas normas contabilísticas, para apresentar demostrações financeiras que retratem uma imagem desejada e não a real da empresa. A consequência da contabilidade criativa é a manipulação dos resu... There are two goals of this dissertation. The main objective of this dissertation is to define the scope of the concept of Creative Accounting and its impact on the financial demonstrations and on the decision making by its users. There is Creative accounting when one takes advantage of the flexibility in accounting standards to make financial demonstrations that portray a desired image rather than a real one.The consequence of creative accounting is the manipulation of the results. The s...

This paper sought to examine the relationship between board diversity and discretionary accruals practices. Data was obtained from annual report for the year 2008 of the top 100 companies in Malaysia corporate governance (MCG) index. The discretionary accrual is measured using modified Jones model. The link was tested between five board diversity (that is, size, independence, competency, remuneration and gender) and discretionary accruals practices. The perspective of resource based view and agency theory was invoked to explain the board diversity that could influence the practice of discretionary accrual. The study revealed that discretionary accruals occurred even for the top 100 MCG companies. Women on board are found to have a positive significant relationship with discretionary accruals which indicate that higher number of women board may increase the discretionary accruals activity. In addition, it was also found that cash flow had a negative significant relationship with discretionary accruals which showed that companies with lower cash flow tend to use accruals to increase earnings.

While studies internationally have found an association between earnings management and the firm's future performance, there is limited literature concerning Indian firms. Prior research in the Indian context has revealed the existence of opportunistic accruals management. However, its impact on a firm's future performance remains unexplored. Thus, this study examines the impact of accrual-based earnings management on future performance among listed non-financial Indian firms. This study estimates accruals management proxies for 2006-2017 using the widely accepted modified-Jones model of discretionary accruals. Firm performance is measured using ROA, ROE, and PE ratio. This study uses a one-step System Generalised Method of Moments (GMM) to address the problem of endogeneity in the dynamic panel model. The result from the estimator indicates that discretionary accruals have a negative impact on accounting-based performance measures (ROA and ROE) and a positive impact on the market-based performance measure (PE ratio). These results are consistent for the three estimators (OLS, FE, and GMM), establishing a robust relationship between accrual management and firm performance. The findings of this study are consistent with the signaling hypothesis and suggest the likelihood of accruals reversal.

The thesis is organized into three independent essays, although linked by the earnings management theme related with business financing. The first test whether there is a positive relationship between the loans obtained from shareholders and earnings management undertaken trough under-invoicing. The methodology underpinning the study is based on a control sample and firms suspected of manipulating sales downward and firms that have present costs of goods sold higher than normal level of actual sales are classified as under-invoicing firms. The empirical evidence suggests that it exists a positive relationship between the raising of loans and the classification of firms as being manipulative. The second discusses the nature of the reaction of Portuguese firms with loans obtained from shareholders exceeding 25000€ when faced with "threats" from the Tax Authorities related to the possibility of being subject to tax audits. The relationship between high loans obtained from shareholders and the "threats" of a tax audit was tested by a linear econometric model. The results suggests that smaller firms with loans obtained from shareholders exceeding 25000€ react to the "threat" of a review of their accounts, reducing those loans to less than 25000€ and converting them to increases in equity. The third examine whether variations in business financing distort the estimation of discretionary accruals and, if so, what or which accruals models are better specified to deal with this issue. The methodology applied adopts a comparative static approach. It consists in the estimation of two versions of each model, whose difference is the fact that one of them contain a dummy variable controlling the effect of variations in financing. The results show that the estimating accruals models analyzed are poorly specified, although some show to be better specified than others.

O presente estudo analisa se existe relação entre a manipulação de resultados e a qualidade da auditoria, baseado no estudo do comportamento dos accruals discricionários nas empresas portuguesas cotadas e não cotadas. A amostra é composta por 11 813 empresas para o período de 2013 a 2015. A literatura sugere que existe uma relação entre a qualidade da auditoria e a manipulação dos resultados, propondo que as empresas de auditoria Big4 apresentam níveis mais elevados de qualidade de auditoria, quando comparadas com as restantes empresas de auditoria, pelo que têm um impacto superior no constrangimento da manipulação dos resultados. A literatura sugere ainda que as empresas não cotadas apresentam uma prática de gestão de resultados mais pronunciada comparativamente às empresas cotadas. Na presente investigação, para o estudo das manipulações dos resultados, será usada a metodologia dos accruals discricionários, calculado segundo o modelo de Jones modificado (1995). Os resultados obtid...

In this study, economic value added and created shareholder value were calculated based on accounting figures and their difference was determined. Then, the reason of this difference has been analyzed using earnings management and corporate governance structure. Earnings management was calculated utilizing discretionary accrual accounting based on adjusted Jones model between 2004 and 2010; executive director ratio, non-executive director ratio, and ownership concentration in companies were examined concerning corporate governance variables. In this regard, regression statistical methods and T, F, and Pearson tests were used for assumptions examination. Selected sample was from accepted companies in Tehran stock exchange. The results showed that difference between economic value added and created shareholder value is meaningful. Examining reasons of the difference indicated that the difference has a meaningful relation with index of discretionary accrual accounting in companies. In addition, relation of executive director ratio and ownership concentration in companies with calculated difference was approved (it was positive) but relation of non-executive director ratio with the difference was not approved (it was negative). Moreover, effect of financial leverage, company size, and their type of ownership on the difference was approved.

In this study, economic value added and created shareholder value were calculated based on accounting figures and their difference was determined. Then, the reason of this difference has been analyzed using earnings management and corporate governance structure. Earnings management was calculated utilizing discretionary accrual accounting based on adjusted Jones model between 2004 and 2010; executive director ratio, non-executive director ratio, and ownership concentration in companies were examined concerning corporate governance variables. In this regard, regression statistical methods and T, F, and Pearson tests were used for assumptions examination. Selected sample was from accepted companies in Tehran stock exchange. The results showed that difference between economic value added and created shareholder value is meaningful. Examining reasons of the difference indicated that the difference has a meaningful relation with index of discretionary accrual accounting in companies. In addition, relation of executive director ratio and ownership concentration in companies with calculated difference was approved (it was positive) but relation of non-executive director ratio with the difference was not approved (it was negative). Moreover, effect of financial leverage, company size, and their type of ownership on the difference was approved.

Th is study investigates the effect of corporate governance mechanisms on reported earnings quality of listed Insurance companies in Nigeria. The Nigerian Insurance industry has over the years faced unique challenges precipitated by lack of clear operational guidance, high premiu m cutting, creative accounting and weak governance dynamics. However, with the introduction of the code of good corporate governance for the industry and adoption of the International Financial Reporting Standards, it is expected that these factors inhibiting the growth of the industry would be mitigated. Th is study is thus poised at presenting a model aimed at ascertaining the extent to which governance mechanisms associate with creative accounting practices in the industry. Using twenty five (25) quoted insurance firms during the period 2007-2010, the study regressed five governance mechanisms on reported earnings quality proxy. Multip le regressions were emp loyed for the analysis using the software SPSS version 17.0. The study finds that board size, board independence and audit committee size are negatively and significantly associated with earnings management while audit co mmittee independence and independent external audit have positive relationship with discretionary accruals. The study thus recommends that the NAICOM 2009 code of corporate governance regulation on board size and board independence be made stringent and sustained and that future research works investigate other governance dynamics such as ownership concentration, audit committee diligence and institutional investors amongst others in other sectors of the Nigerian econo my.

In this study, economic value added and created shareholder value were calculated based on accounting figures and their difference was determined. Then, the reason of this difference has been analyzed using earnings management and corporate governance structure. Earnings management was calculated utilizing discretionary accrual accounting based on adjusted Jones model between 2004 and 2010; executive director ratio, non-executive director ratio, and ownership concentration in companies were examined concerning corporate governance variables. In this regard, regression statistical methods and T, F, and Pearson tests were used for assumptions examination. Selected sample was from accepted companies in Tehran stock exchange. The results showed that difference between economic value added and created shareholder value is meaningful. Examining reasons of the difference indicated that the difference has a meaningful relation with index of discretionary accrual accounting in companies. In addition, relation of executive director ratio and ownership concentration in companies with calculated difference was approved (it was positive) but relation of non-executive director ratio with the difference was not approved (it was negative). Moreover, effect of financial leverage, company size, and their type of ownership on the difference was approved.

In this study, economic value added and created shareholder value were calculated based on accounting figures and their difference was determined. Then, the reason of this difference has been analyzed using earnings management and corporate governance structure. Earnings management was calculated utilizing discretionary accrual accounting based on adjusted Jones model between 2004 and 2010; executive director ratio, non-executive director ratio, and ownership concentration in companies were examined concerning corporate governance variables. In this regard, regression statistical methods and T, F, and Pearson tests were used for assumptions examination. Selected sample was from accepted companies in Tehran stock exchange. The results showed that difference between economic value added and created shareholder value is meaningful. Examining reasons of the difference indicated that the difference has a meaningful relation with index of discretionary accrual accounting in companies. In addition, relation of executive director ratio and ownership concentration in companies with calculated difference was approved (it was positive) but relation of non-executive director ratio with the difference was not approved (it was negative). Moreover, effect of financial leverage, company size, and their type of ownership on the difference was approved.

In this study, economic value added and created shareholder value were calculated based on accounting figures and their difference was determined. Then, the reason of this difference has been analyzed using earnings management and corporate governance structure. Earnings management was calculated utilizing discretionary accrual accounting based on adjusted Jones model between 2004 and 2010; executive director ratio, non-executive director ratio, and ownership concentration in companies were examined concerning corporate governance variables. In this regard, regression statistical methods and T, F, and Pearson tests were used for assumptions examination. Selected sample was from accepted companies in Tehran stock exchange. The results showed that difference between economic value added and created shareholder value is meaningful. Examining reasons of the difference indicated that the difference has a meaningful relation with index of discretionary accrual accounting in companies. In addition, relation of executive director ratio and ownership concentration in companies with calculated difference was approved (it was positive) but relation of non-executive director ratio with the difference was not approved (it was negative). Moreover, effect of financial leverage, company size, and their type of ownership on the difference was approved.

The purpose of this paper is to test the effect of the board characteristics including; its size, independence, the CEO duality and its activity on the earnings management in companies listed on the SBF 250. We use discretionary accruals (DA) as a proxy for the earnings management. To calculate DA, we use two models which are the modified Jones model (and performance-matched discretionary accruals estimated from the modified Jones model. Based on a sample of 70 French listed companies over the period of 4 years from 2008 to 2012, the study finds that the earnings management is negatively associated with the board size. This suggests that large boards are more effective in monitoring a CEO's action. The CEO duality is found to have a positive relationship with the earnings management suggesting that, by combining the role of the CEO and that of the chairman of the board helps increase the earnings management because the CEO may reduce the effectiveness of the board and create a conflict between the management and the board that may reduce the earnings management. Moreover, the board activity is found to have a positive relation with the earnings management suggesting that a board meeting more often helps to increase the earnings management. The present study finds no effect of the board independence on the earnings management. This result is in contradiction with previous studies that have found a significant negative relationship between these two variables. Overall, from the result of this study, we conclude that the earnings management takes place in French listed companies.

To determine the effects of corporate governance on earnings management, this paper analyzed 171 annualreports from issued 2006 to 2009 by 57 non-financial, joint stock companies implementing GCG (GoodCorporate Governance) practices, which were listed on the Indonesia Stock Exchange (IDX). Six corporategovernance variables (board composition, independent commissioners, separate chairman/CEO roles, auditcommittee, managerial share ownership, and audit quality) as well as three control variables (leverage, size,and ROA) were used. The results showed that two corporate governance variables significantly influencedearnings management practices (separate chairman/CEO roles and managerial share ownership); the othervariables had no effect because these companies used GCG practices only to follow regulations rather than tomonitor and control.

This study examines the relationships between a certain corporate governance related mechanism i.e. the quality of remuneration committee, and management compensation plan design, and how performance-based management compensation affects firm performance in the main market of Bursa Malaysia, in 207 out of 828 companies from 2008 to 2010. Newey-West heteroskedasticity and autocorrelation consistent (HAC) Standard Errors and Covariance were used for the estimation of the ordinary least squares (OLS) regression. The results have shown that the quality of remuneration committee is found to have a significant positive impact on performance-based management compensation. Also, performance-based management compensation is found to have a significant positive impact on firm financial performance. Overall, the results of this study indicate that corporate governance related factors such as the quality of remuneration committee, have a significant influence on the design of management compens...

In this study, economic value added and created shareholder value were calculated based on accounting figures and their difference was determined. Then, the reason of this difference has been analyzed using earnings management and corporate governance structure. Earnings management was calculated utilizing discretionary accrual accounting based on adjusted Jones model between 2004 and 2010; executive director ratio, non-executive director ratio, and ownership concentration in companies were examined concerning corporate governance variables. In this regard, regression statistical methods and T, F, and Pearson tests were used for assumptions examination. Selected sample was from accepted companies in Tehran stock exchange. The results showed that difference between economic value added and created shareholder value is meaningful. Examining reasons of the difference indicated that the difference has a meaningful relation with index of discretionary accrual accounting in companies. In addition, relation of executive director ratio and ownership concentration in companies with calculated difference was approved (it was positive) but relation of non-executive director ratio with the difference was not approved (it was negative). Moreover, effect of financial leverage, company size, and their type of ownership on the difference was approved.

Fiscal earnings, measures the performance of the company during the financial year. Motivated by different factors such as those related to the capital market, contractual motives etc, managers can manipulate earnings, increasing or reducing them and this phenomenon is recognized as “earnings management”. If we accept that the initiatives of “earnings management ” lead to distortion of the financial results, it means that financial reports can be considered as poor quality reports, and financial information provided to the users and various parties of interest is also of poor quality. This paper is focused on reviewing the existing literature with regard to the Earnings Management in response to the growing pressure of investors, policy makers, and companies ’ governance reform mechanisms to curb opportunistic behavior of the managers of these companies. It also examines the existence of this phenomenon in Albanian context as well as tests the importance of Modified Jones Model as a...

Mergers and acquisition has become one of favorable strategies for companies to grow. It offers the opportunity for companies to grow instantly and the capability to have instant access towards the market in which the acquired company operates. However, many literatures documented few Mergers and Acquisition that actually considered to be successful, and of the argument that causing it was cultural differences between the acquiring and the acquired companies. The acquisition of Maybank on Bank International Indonesia (BII) gave an opportunity to study whether close cultural differences between the acquired and the acquiring companies might produce better results in such acquisition attempt. The aim of this study was to see whether the implementation of good leadership, people management, simplified organization structure, good communication and cultural development activities might enhance successful acquisition. Results indicated that all of those variables were implemented well du...

do Algarve Resumo O estudo aborda o problema da previsão de acréscimos ou decréscimos dos lucros por acção de empresas com base na informação contabilística do ano anterior. A amostra utilizada engloba as principais empresas portuguesas, industriais e de serviços, a transaccionar na Bolsa de Valores de Lisboa e Porto entre os anos 1993 e 1997. As variáveis independentes utilizadas na construção dos modelos baseiam-se em indicadores contabilísticos. Os resultados sublinham a importância da informação contabilística na previsão de acréscimos ou decréscimos nos lucros por acção. Ficou demonstrada a grande importância das variáveis artificiais associadas a alguns rácios na melhoria dos resultados. Certas transformações de dados podem, em alguns casos, melhorar a capacidade preditiva dos modelos Um outro factor inovador que contribuiu decisivamente para a melhoria da capacidade preditiva dos modelos foi a constituição de sub-amostras homogéneas segundo as características contabilísticas das empresas.

do Algarve Resumo O estudo aborda o problema da previsão de acréscimos ou decréscimos dos lucros por acção de empresas com base na informação contabilística do ano anterior. A amostra utilizada engloba as principais empresas portuguesas, industriais e de serviços, a transaccionar na Bolsa de Valores de Lisboa e Porto entre os anos 1993 e 1997. As variáveis independentes utilizadas na construção dos modelos baseiam-se em indicadores contabilísticos. Os resultados sublinham a importância da informação contabilística na previsão de acréscimos ou decréscimos nos lucros por acção. Ficou demonstrada a grande importância das variáveis artificiais associadas a alguns rácios na melhoria dos resultados. Certas transformações de dados podem, em alguns casos, melhorar a capacidade preditiva dos modelos Um outro factor inovador que contribuiu decisivamente para a melhoria da capacidade preditiva dos modelos foi a constituição de sub-amostras homogéneas segundo as características contabilísticas das empresas.

Fiscal earnings, measures the performance of the company during the financial year. Motivated by different factors such as those related to the capital market, contractual motives etc, managers can manipulate earnings, increasing or reducing them and this phenomenon is recognized as "earnings management". If we accept that the initiatives of "earnings management" lead to distortion of the financial results, it means that financial reports can be considered as poor quality reports, and financial information provided to the users and various parties of interest is also of poor quality. This paper is focused on reviewing the existing literature with regard to the Earnings Management in response to the growing pressure of investors, policy makers, and companies' governance reform mechanisms to curb opportunistic behavior of the managers of these companies. It also examines the existence of this phenomenon in Albanian context as well as tests the importance of Modified Jones Model as an efficient tool for detection of abnormal accruals, used as a proxy for earnings management. The results show that firms in the Albanian market are engaged in earnings management initiatives.

Objective-A rising number of cases involving ethical misconduct within firms have of late received considerable attention in Malaysia. Despite the country's declaring having a strong corporate governance policy, strengthened through the Code of Ethics for Company Directors and Malaysia Code of Corporate Governance, unethical practices, and lack of integrity within firms remain an issue. This paper aims to review the current implementation of corporate ethical conducts among corporate governance practitioners as well as factors that influence corporate ethics commitment in a firm. Methodology/Technique-This paper is developed from extensive readings of previous literature on corporate governance practices and their effect on the quality of financial reports. Findings-This paper discloses collective approaches of corporate ethics practiced in Malaysian firms and how the implementation has enhanced the firms' overall financial reporting quality. It demonstrates current issues and the importance of corporate ethics commitment to enhance financial reporting quality. Firms that emphasize ethical commitments, reduce the risk of financial statement fraud and firms will naturally gain trust from their stakeholders. Novelty-This paper stresses the importance of sound ethical conduct above other factors that influence the financial reporting quality of firms in Malaysia. This paper is the result of extensive research on corporate ethics commitment and financial reporting quality.

Malaysian public listed companies will attempt to portray a positive outlook of business in order to provide confidence to shareholders and investors regarding the profitability and viability of the company. A key method used by the management to manage earnings and show better performance is through accrual accounting. This method of earnings management is not legally prohibited and is based main ly on the co mpany's choice of accounting policies. The negative impact on the performance of the co mpany can be directly traced to the level of earn ings management in the co mpany. The presence of the Audit Co mmittee is mandated in all Malaysian Public Listed companies by virtue of the Bursa Malaysia Listing Requirements. The monitoring and oversight factor of the Audit Co mmittee provides a check and balance mechanism which may be effect ive in curbing rampant earn ings management. This study of 153 Malaysian Public Listed companies utilises secondary data derived fro m Annual Reports of Year 2011 to ascertain the impact of Audit Co mmittee characteristics, namely frequency of Audit Co mmittee meet ings, size of Audit Co mmittee and independence of the Audit Committee, on earnings management. The pro xy for earn ings management is discretionary accruals and the modified Jones Model is used to determine discretionary accruals.

This paper examines the characteristics of the audit committee towards performance before and after the revised code of corporate governance in October 2007.The review of the code is to improve and strengthen the quality, and the effectiveness of the board and audit co mmittee in the public listed company. In this study, we focus on the Government Linked Co mpanies (GLCs) to look at the reinforcement of the rev ised corporate governance 2007 among the GLCs as past study has shown puzzling results whether GLCs have fulfilled the requirements by the Malaysia Code of Corporate Governance as reported in the Securities Co mmission in 2007. The finding showsthat there is an imp rovement in the corporate governance practice specifically in the characteristics of the audit committee at the firm and itsinfluence to improve the performance of the firm among the GLCs.

do Algarve Resumo O estudo aborda o problema da previsão de acréscimos ou decréscimos dos lucros por acção de empresas com base na informação contabilística do ano anterior. A amostra utilizada engloba as principais empresas portuguesas, industriais e de serviços, a transaccionar na Bolsa de Valores de Lisboa e Porto entre os anos 1993 e 1997. As variáveis independentes utilizadas na construção dos modelos baseiam-se em indicadores contabilísticos. Os resultados sublinham a importância da informação contabilística na previsão de acréscimos ou decréscimos nos lucros por acção. Ficou demonstrada a grande importância das variáveis artificiais associadas a alguns rácios na melhoria dos resultados. Certas transformações de dados podem, em alguns casos, melhorar a capacidade preditiva dos modelos Um outro factor inovador que contribuiu decisivamente para a melhoria da capacidade preditiva dos modelos foi a constituição de sub-amostras homogéneas segundo as características contabilísticas das empresas.

This study examines the impact of company and board characteristics on earnings management practices among Malaysian public listed companies. In particular, firm size and cash flow from operations represent the company characteristics; whereas board size and board race represent the board characteristics. Data are obtained using content analysis on the annual report of 214 companies for the year 2008. The earnings management practice is measured by discretionary current accruals based on modified Jones (1991) model. The study reveals that firm size has a positive significant relationship with earnings management. This indicates that as the total assets increase, the company may have higher incentive to engage in earnings management activities. Additionally cash flows from operating activities are found to have a significant negative relationship with earnings management which shows that companies with poor performance tend to use accruals to increase earnings. The results, however, indicate that board size and board race do not influence the practice of earnings management.

This paper focuses on two important characteristics of board effectiveness: (1) the proportion of independent non-executive directors; and (2) CEO Duality. The objective of this study is to examine whether the presence of a majority of independent non-executive directors and the separation role between chairman and CEO, as recommended in the Malaysian Code on Corporate Governance (MCCG) 2000, effectively constrains the incidence of earnings management as measured by income-increasing and incomedecreasing discretionary accruals. Using data from the top 200 nonfinancial companies listed on Bursa Malaysia's Main Board and Second Board for the year 2004, this study finds a positive significant result of board independence when firms undershoot target earnings. Although contradictory to the prediction of agency theory, the results show that a higher proportion of independent non-executive directors is associated with higher income-increasing earnings manipulations. Neither board independence nor CEO Duality was found significant in other models tested regarding income-increasing and incomedecreasing earnings management. The results of this study cast doubt on the notion that the independence of directors and the role separation between the chairman and the CEO reduces the incidence of earnings management activity, especially with highly concentrated ownership as is typical in Malaysia.

This paper proposes a conceptual framework to investigate the role of family ownership for mitigating earnings management (accrual & real). Family ownership is among the corporate governance primary mechanisms that have been a focus of many researchers and scholars. The present study argues that firms with family ownership are less likely to allow earnings management because they have typically invested a lot of their private fortune in the firm and families are more concerned about the survival of the firm and its reputation; thus, they have a strong motivation to monitor management very well. Despite that, there is a lack of prior studies that examine these relationships in developing countries. So, the main objective of this study was to bridge this gap and try to enrich the existing literature.

Recent research on corporate governance has identified the impact of different corporate governance variables on earrings management. Corporate collapses all over the world during the recent past have increased the interest in corporate governance. Therefore, it is worthwhile to look in to the previous literature relating to corporate governance and earnings management. Most of the studies were conducted using the board characteristics and audit committee characteristics. Almost all prior studies recommended the need of effective corporate governance practices in order to reduce earnings management and prevent possible corporate collapses.

This paper examines the characteristics of the audit committee towards performance before and after the revised code of corporate governance in October 2007.The review of the code is to improve and strengthen the quality, and the effectiveness of the board and audit co mmittee in the public listed company. In this study, we focus on the Government Linked Co mpanies (GLCs) to look at the reinforcement of the rev ised corporate governance 2007 among the GLCs as past study has shown puzzling results whether GLCs have fulfilled the requirements by the Malaysia Code of Corporate Governance as reported in the Securities Co mmission in 2007. The finding showsthat there is an imp rovement in the corporate governance practice specifically in the characteristics of the audit committee at the firm and itsinfluence to improve the performance of the firm among the GLCs.

Th is study investigates the effect of corporate governance mechanisms on reported earnings quality of listed Insurance companies in Nigeria. The Nigerian Insurance industry has over the years faced unique challenges precipitated by lack of clear operational guidance, high premiu m cutting, creative accounting and weak governance dynamics. However, with the introduction of the code of good corporate governance for the industry and adoption of the International Financial Reporting Standards, it is expected that these factors inhibiting the growth of the industry would be mitigated. Th is study is thus poised at presenting a model aimed at ascertaining the extent to which governance mechanisms associate with creative accounting practices in the industry. Using twenty five (25) quoted insurance firms during the period 2007-2010, the study regressed five governance mechanisms on reported earnings quality proxy. Multip le regressions were emp loyed for the analysis using the software SPSS version 17.0. The study finds that board size, board independence and audit committee size are negatively and significantly associated with earnings management while audit co mmittee independence and independent external audit have positive relationship with discretionary accruals. The study thus recommends that the NAICOM 2009 code of corporate governance regulation on board size and board independence be made stringent and sustained and that future research works investigate other governance dynamics such as ownership concentration, audit committee diligence and institutional investors amongst others in other sectors of the Nigerian econo my.

Board of directors play a vital role in controlling agency problem between shareholders and managers arise due to earnings management. This paper examines the roles of independent members on the board, chief executive officer who also serves as a chairman of the company (hereinafter called CEO duality), board size on earnings management practices. After controlling for size, leverage and growth, we found discretionary accruals as a proxy for earnings management is positively related to the existence of CEO duality, and negatively related to board size. Also, examination of the data shows that the ratio of independent board members is not significantly related to earnings management. The findings of this paper will be of interest to investors in the Egyptian stock market. This paper also provides many recommendations to the regulatory authorities in Egypt regarding ways to strengthen and reinforce the Board of Director's Attributes of companies JEL Code:

The quality of information issue has assumed a key role in the accounting and finance literature. The literature distinguishes various forms of earnings management.
Earning management can be made via real decisions or via accruals. Moreira (2013) defines manipulation by real decisions as "discretionary choice of the transaction occurrence of time in order to produce the desired effect on results”. This thesis will examine the particular case of an accruals model, that is the model of McNichols (2002), which was estimated based on a sample of 8,930 American companies for the period between 1988 and 2014, with a total of 35,670 observations.
Based on discretionary accruals estimated by the McNichols model (2002), 4 manipulation indicators were proposed, and then compared with cases of effective manipulation detected by the SEC (corresponding to 1,256 US companies between 1990 and 2013).
The question that this thesis seeks to respond is whether the McNichols model (2002) is able to earnings management.
The proposed indicators were prone to type II errors. In 32% of our sample, none of the proposed indicators was able to detect actual manipulations. However, one of the calculated indicators (based in absolute value ratio of discretionary accruals and working capital), correctly detected 64% of manipulations identified by the SEC.