Corporate Accruals

espanolLa integridad de las autoridades publicas, expresion su honestidad y confianza en ellas, sustenta la correcta gobernanza en las Administraciones Publicas. El termino “integridad” hace referencia al uso de valores, reglas y estandares en las actividades cotidianas del Sector Publico. Este articulo se centra en el fenomeno, relativamente joven, de la integridad, a la luz de las investigaciones llevadas a cabo por la OCDE. Ademas, se lleva a cabo un analisis de conglomerados para tratar de dar respuesta a la pregunta relativa a como los Estados miembro aplican la regla de integridad; o, en otros terminos, para determinar los grupos de paises que, a efectos de integridad, muestran mayores similitudes. Para ello se utilizara un algoritmo de agrupacion “k-medias”, que identificara las tendencias de los atributos especificos que miden el fenomeno de la integridad, asi como la similitud entre paises a este respecto. Los datos utilizados en el articulo proceden de la informacion sobre...

This study investigates the relationship between board independence and earnings management, focusing on its implications for corporate governance and financial reporting quality. The research evaluates whether a higher proportion of independent directors on corporate boards mitigates earnings management practices, thereby enhancing transparency and accountability. The study covers ten years from 2014 to 2023, utilizing data from 153 publicly traded companies across various sectors. A panel data methodology was employed, combining financial statements and corporate governance reports. The analysis applied an Ordinary Least Squares regression analysis to examine the impact of board independence on accrual-based earnings management, measured using the Modified Jones Model. Robustness checks were conducted to ensure the validity of findings, including alternative specifications and additional control variables such as audit quality, profitability, liquidity, institutional ownership, firm size, and leverage effects. The results reveal that board independence is negatively and significantly associated with earnings management, indicating that independent directors play a crucial role in curbing opportunistic financial reporting. Specifically, firms with a higher percentage of independent board members exhibited lower discretionary accruals, suggesting enhanced oversight and governance. These findings remained consistent across various robustness tests. This study makes an original contribution by providing empirical evidence from an emerging market context, where governance practices often differ from developed economies. It highlights the importance of regulatory frameworks promoting board independence to improve financial reporting quality. The findings have implications for policymakers, regulators, and corporate stakeholders in designing effective governance mechanisms to safeguard shareholder interests and enhance market confidence.

espanolEste articulo se centra en la medicion de la calidad de la gestion corporativa mediante la combinacion de una serie de estadisticos relativos a los devengos discrecionales. El objetivo es evaluar la calidad de la gestion en una serie de paises asiaticos: Malasia, Indonesia, Tailandia, Singapur, Hong-Kong, Japon y China. Se utiliza el concepto de flujo de caja libre, el modelo de Kothari-Jones, ocho estadisticos descriptivos y una escala de siete puntos para cada estadistico. Los resultados obtenidos muestran que la mejor calidad en la gestion tiene lugar en Japon (50 puntos), seguido de Tailandia (44), Singapur (38), Malasia (35), China (27), Hong Kong (21) e Indonesia (9) EnglishThis study focuses on the measurement of the quality of corporate management by combining a number of descriptive statistics of corporate accruals. The objective is to evaluate the quality of management in certain Asian countries, namely Malaysia, Indonesia, Thailand, Singapore, Hong Kong, Japan and ...

This study examines the linear relationship between corporate attributes and corporate accruals (discretionary accruals) in Bangladesh. The behaviour of corporate accruals is explained by corporate attributes such as asset size, turnover, earnings per share, number of shareholders, year of listing, international link of audit firm, ownership structure, internationality, market category, and leverage. A statistically significant relationship is observed between corporate accruals and asset size. We also observed inconsistent growth of inventory, faster growth of accounts receivable with an overvaluation of fixed assets reported by probe committee. Indeed, corporate accruals are not dependent on corporate attributes but rather on the mindset of the corporate manager. Management is in a unique position to produce fraudulent financial statements. The study suggests a number of measures including the establishment of an Institute of Chartered Surveyor of Bangladesh (ICSB), the introduction of audit reviews, the updating of corporate governance guidelines, increasing the effectiveness of board independence, and the strengthening institutional setting, in order to protect the rights of stakeholders, especially marginal shareholders.

The purpose of this study is to show a new way of assessing the quality of corporate financial reporting. We assess the quality of corporate financial reporting in Bangladesh, a country where the family predominates and the business environment is virtually unregulated, with managerial incentives rather than regulatory influence more likely to induce disclosures and to influence other reporting issues. Both quantitative and qualitative measures are taken into consideration to account for various aspects of financial reporting, as a single proxy does not cover multiple aspects. The overall disclosure index (proxy 1) and corporate accruals (proxy 2) are taken as quantitative measures, while external users' perceptions about financial reporting (proxy 3) are taken as a qualitative measure. Lower disclosure index values, higher corporate accruals, and users' negative impressions result from lower quality financial reports. This study provides a new way of measuring the quality of financial reporting and contributes two new proxies (proxy 1 and proxy 3) to the existing literature on assessing the quality of financial reporting.

espanolEste articulo examina el efecto de la politica de precios en el rendimiento de las empresas nigerianas. Para ello se utiliza la informacion procedente de 101 empresas que cotizan en la Bolsa nigeriana. Los datos, de seccion cruzada,se obtuvieron de losinformes anuales de las companias estudiadas. Para cumplir el objetivo perseguido se utilizan modelos de regression. Los resultados obtenidos ponen de manifiesto que el coste de ventas y los objetivos de la compania tienen un efecto positivo signifidcativo en la rentabilidad de los activos. Por lo que se refiere a las variables de control, el impacto de la demanda de mercado en dicha rentabilidad y la disponibilidad de un sustitutivo similar tienen tambien un efecto positive y significativo en el rendimiento, mientras que el impacto en el del segmento de mercado, la tendencia macroeconomica y la percepcion del consumidor es no significativo. Estosresultadossugieren hacer un esfuerzo en la reduccion de los costes de produccion en...

The aim of this study is to examine the factors that influence companies to disclose voluntary information in their annual reports of Textile Manufacturing Companies in Bangladesh. The study is used ordinary least squares (OLS) regression model to examine the relationship between dependent variable and independent variables. The factors are proportion of independent non-executive directors (INDs), board size, board audit committee, ownership structure, Profitability and firm size. The extent of voluntary disclosure level is measured by using 68 items of information. Data have been taken from annual reports of 21 listed Textile Manufacturing Companies in DSE of Bangladesh-2010. The result shows a positive association between board size and voluntary disclosure and also total assets with voluntary disclosure. In contrast, the extent of voluntary disclosure is negatively related to the ownership structure.

The aim of this study is to determine the extent and level of voluntary reporting of the listed companies in Bangladesh. It also explores the potential effects of corporate governance characteristics, ownership aspects and firm characteristics on voluntary reporting. The sample of the study consists of 123 companies with 861 firm year observations listed in the Dhaka Stock Exchange, Bangladesh for the year 2004 to 2010. To measure the extent of reporting self constructed checklists have been used which contains 97 items focusing on corporate social reporting, corporate environmental reporting and corporate sustainability reporting. The study found that level of total voluntary reporting in the annual reports of listed Bangladeshi companies is low. However, a gradual increase in the extent of voluntary reporting and its categories has been noticed over the period of study. Through regression analysis, the outcomes show significant positive relationship between voluntary reporting and...

espanolEste articulo examina el efecto de la politica de precios en el rendimiento de las empresas nigerianas. Para ello se utiliza la informacion procedente de 101 empresas que cotizan en la Bolsa nigeriana. Los datos, de seccion cruzada,se obtuvieron de losinformes anuales de las companias estudiadas. Para cumplir el objetivo perseguido se utilizan modelos de regression. Los resultados obtenidos ponen de manifiesto que el coste de ventas y los objetivos de la compania tienen un efecto positivo signifidcativo en la rentabilidad de los activos. Por lo que se refiere a las variables de control, el impacto de la demanda de mercado en dicha rentabilidad y la disponibilidad de un sustitutivo similar tienen tambien un efecto positive y significativo en el rendimiento, mientras que el impacto en el del segmento de mercado, la tendencia macroeconomica y la percepcion del consumidor es no significativo. Estosresultadossugieren hacer un esfuerzo en la reduccion de los costes de produccion en...

Social, responsible, sustainable-these are the new buzz words when it comes to conducting business. We hear and read them every day in the news, more in reference to how things should be than to how things actually are. Corporate social responsibility was first conceived as a kind of separate wing of the enterprise, where it engaged in activities purported to serve society. But now society demands enterprises integrate the values behind such activities into their core business. As a consequence of the financial crisis, regulators and customers are rediscovering the stakeholder value model of "dual bottom line" banks, such as savings and retail and cooperative banks. They, unlike banks wedded to the shareholder value model, are not driven exclusively by profit; they're on a "social mission" that is a product of their historical origins. And yet they're as efficient as purely profit-driven financial institutions. Socially committed banks have developed business principles to act in a fair, transparent, risk-cautious manner vis-à-vis their clients and contribute to the welfare of the citizen and of their region. These principles address what went wrong in the banking sector in recent years and emphasise excellence in governance, client relationships, fair products and services, risk-free investment, financial inclusion, respect for the environment, financial education, community involvement, fair employment and macroeconomic stability. What does it mean for a bank to be responsible in its daily activity? What does it imply in terms of efficiency, profitability and business model? Does it require a partial or total shift towards a stakeholder value model, and which would be more beneficial to the economy? These are the questions this article attempts to answer.

The debate on the impact of corporate governance mechanism on earnings management remains inconclusive. The current paper explored the use of Two Stage Least Square (2SLS) estimation techniques to examine the relationship between the two constructs based on data sourced from listed companies on the floor of the Nigerian Stock Exchange between 2012 to 2016. We excluded financial industry data based on the peculiarity of the sector’s annual financial reporting system. Our results reveal that at best the relationship between corporate governance code and earnings management is mixed. In specific, it shows that governance code exerts negative influence on earnings management, while a positive relationship was observed to exist between earnings management and Insiders ownership. It was also noted that board independence and auditors’ independence has little or no effect on earnings management. The study therefore recommend that in order to curb earnings management practices, governance c...

The study is about capital structure policy and its impacts on value of the firm. The outcome of this study was both the primary and secondary data. The study was based on opinions survey of 80 respondents of the 20 manufacturing corporate firms, enlisted under Dhaka Stock Exchange. The empirical analysis of the study was limited to a period of five years ranging 2008-2012. The major findings of the study are: (i) the most important determinant of capital structure policy as rated by the respondents have been financial risk , profitability, availability of fund, productivity, liquidity, operating risk, growth rate, proper timing, corporate tax, stability of sales/ investment etc, (ii) the study reveals that in terms of the average positions of capital structure and financial structure during 2008-2012, Beximco pharma has ranked first followed by Square pharma, Apex Adelchi, DESCO, ACI ltd, Titas gas, Bata shoe,Aftab automobile, Reneata pharma, Square textile ltd etc,(iii) as regards the value of the firm during the study period, Titas gas has obtained first rank followed by Square pharma, DESCO, Beximco pharma, BATBC, ACI, Reneta pharma, Apex Tennary, Apex Adelchi, Bata shoe and so on.(iv) this study has portrayed that the independent variables namely capital structure (CS), debt to equity (DER) & debt to asset (DR), fixed assets to total assets(Tangibility), earnings before interest and taxes to interest charges(ICR), financial leverage multiplier(FLM) have influenced value of the firm(VF) to the extent of 79.1 percent significantly. Therefore, it is recommended that the relevant firm's authority should take proper measures in order to improve the independent variables having positive influence on value of the firms.

The aim of this study is to determine the extent and level of voluntary reporting of the listed companies in Bangladesh. It also explores the potential effects of corporate governance characteristics, ownership aspects and firm characteristics on voluntary reporting. The sample of the study consists of 123 companies with 861 firm year observations listed in the Dhaka Stock Exchange, Bangladesh for the year 2004 to 2010. To measure the extent of reporting self constructed checklists have been used which contains 97 items focusing on corporate social reporting, corporate environmental reporting and corporate sustainability reporting. The study found that level of total voluntary reporting in the annual reports of listed Bangladeshi companies is low. However, a gradual increase in the extent of voluntary reporting and its categories has been noticed over the period of study. Through regression analysis, the outcomes show significant positive relationship between voluntary reporting and...

The study is about capital structure policy and its impacts on value of the firm. The outcome of this study was both the primary and secondary data. The study was based on opinions survey of 80 respondents of the 20 manufacturing corporate firms, enlisted under Dhaka Stock Exchange. The empirical analysis of the study was limited to a period of five years ranging 2008-2012. The major findings of the study are: (i) the most important determinant of capital structure policy as rated by the respondents have been financial risk , profitability, availability of fund, productivity, liquidity, operating risk, growth rate, proper timing, corporate tax, stability of sales/ investment etc, (ii) the study reveals that in terms of the average positions of capital structure and financial structure during 2008-2012, Beximco pharma has ranked first followed by Square pharma, Apex Adelchi, DESCO, ACI ltd, Titas gas, Bata shoe,Aftab automobile, Reneata pharma, Square textile ltd etc,(iii) as regards the value of the firm during the study period, Titas gas has obtained first rank followed by Square pharma, DESCO, Beximco pharma, BATBC, ACI, Reneta pharma, Apex Tennary, Apex Adelchi, Bata shoe and so on.(iv) this study has portrayed that the independent variables namely capital structure (CS), debt to equity (DER) & debt to asset (DR), fixed assets to total assets(Tangibility), earnings before interest and taxes to interest charges(ICR), financial leverage multiplier(FLM) have influenced value of the firm(VF) to the extent of 79.1 percent significantly. Therefore, it is recommended that the relevant firm's authority should take proper measures in order to improve the independent variables having positive influence on value of the firms.

The main purpose of this study is to explore the association between accruals management (AM) and board attributes. Additionally, the study investigates the moderating role of ownership structures. In order to perform the study, five years of data (2016–2020) for 159 firms listed on the Dhaka Stock Exchange (DSE) have been considered, consisting of 759 firm-year observations. Agency theory that governs the relationship between the principal and the agent has been applied here. We have used STATA software with the random effects GLS model to run the regression on the balanced panel data. The results of the analysis show that, while board size and board independence have significant positive relation with AM, gender diversity, institutional ownership and family ownership show a significant negative association with AM. The analysis of moderating variables shows that foreign ownership has a significant negative impact on the association between board expertise and AM, and family owners...

The desire of every business is to operate beyond the foreseeable future period and maximize contributions and shareholders' wealth in the face of economic uncertainties. These challenges are surmounted through the recognition and recording of all economic transactions in the books of account to boost stakeholder’s confidence. The study was set to examine the extent to which accruals discretionarily created by management will affect the going concern status of manufacturing firms. The expo-facto research design was adopted and data were gathered using the retrieval method. Panel regression model was employed combining the properties of time series and cross-sectional data. The study, from the empirical findings establishes that discretionary accruals exerted positive and negative significant effects on both liquidity positions and profitability levels of the studied companies, and thus affect the going concern status of manufacturing companies.

The main purpose of this study is to explore the association between accruals management (AM) and board attributes. Additionally, the study investigates the moderating role of ownership structures. In order to perform the study, five years of data (2016-2020) for 159 firms listed on the Dhaka Stock Exchange (DSE) have been considered, consisting of 759 firm-year observations. Agency theory that governs the relationship between the principal and the agent has been applied here. We have used STATA software with the random effects GLS model to run the regression on the balanced panel data. The results of the analysis show that, while board size and board independence have significant positive relation with AM, gender diversity, institutional ownership and family ownership show a significant negative association with AM. The analysis of moderating variables shows that foreign ownership has a significant negative impact on the association between board expertise and AM, and family ownership has a significant negative impact on board independence and AM. These findings indicate that the type of ownership structure may be useful in attaining the objectives of the board in Bangladesh. The findings of the study will be relevant for the regulatory authorities in Bangladesh in controlling and implementing new guidelines related to corporate governance. Contribution/Originality: This study examines the role of ownership structure on the relationship between board and earnings management, which is one of the very few studies in the context of an emerging economy. Moreover, the study applies the extended modified Jones model, which enhances the literature on accruals estimation.

The aim of this study is to examine the factors that influence companies to disclose voluntary information in their annual reports of Textile Manufacturing Companies in Bangladesh. The study is used ordinary least squares (OLS) regression model to examine the relationship between dependent variable and independent variables. The factors are proportion of independent non-executive directors (INDs), board size, board audit committee, ownership structure, Profitability and firm size. The extent of voluntary disclosure level is measured by using 68 items of information. Data have been taken from annual reports of 21 listed Textile Manufacturing Companies in DSE of Bangladesh-2010. The result shows a positive association between board size and voluntary disclosure and also total assets with voluntary disclosure. In contrast, the extent of voluntary disclosure is negatively related to the ownership structure.

espanolLa integridad de las autoridades publicas, expresion su honestidad y confianza en ellas, sustenta la correcta gobernanza en las Administraciones Publicas. El termino “integridad” hace referencia al uso de valores, reglas y estandares en las actividades cotidianas del Sector Publico. Este articulo se centra en el fenomeno, relativamente joven, de la integridad, a la luz de las investigaciones llevadas a cabo por la OCDE. Ademas, se lleva a cabo un analisis de conglomerados para tratar de dar respuesta a la pregunta relativa a como los Estados miembro aplican la regla de integridad; o, en otros terminos, para determinar los grupos de paises que, a efectos de integridad, muestran mayores similitudes. Para ello se utilizara un algoritmo de agrupacion “k-medias”, que identificara las tendencias de los atributos especificos que miden el fenomeno de la integridad, asi como la similitud entre paises a este respecto. Los datos utilizados en el articulo proceden de la informacion sobre...

This study examines the linear relationship between corporate attributes and corporate accruals (discretionary accruals) in Bangladesh. The behaviour of corporate accruals is explained by corporate attributes such as asset size, turnover, earnings per share, number of shareholders, year of listing, international link of audit firm, ownership structure, internationality, market category, and leverage. A statistically significant relationship is observed between corporate accruals and asset size. We also observed inconsistent growth of inventory, faster growth of accounts receivable with an overvaluation of fixed assets reported by probe committee. Indeed, corporate accruals are not dependent on corporate attributes but rather on the mindset of the corporate manager. Management is in a unique position to produce fraudulent financial statements. The study suggests a number of measures including the establishment of an Institute of Chartered Surveyor of Bangladesh (ICSB), the introduction of audit reviews, the updating of corporate governance guidelines, increasing the effectiveness of board independence, and the strengthening institutional setting, in order to protect the rights of stakeholders, especially marginal shareholders.

A new framework of corporate governance, codes of ethics, principles, compensation schemes and market discipline are being implemented in the banking industry in order to restore trust in financial services. This paper focuses on the limitations of this approach to developing a responsible banking culture in the industry. Without ethical leadership and professionalism, a responsible banking model cannot be developed. A person-centered approach has been largely neglected. Professionalism in the industry should mean that bankers understand their duty to uphold the purpose of the firm and demonstrate integrity, honesty and competency regardless of their job or position. Based on recent initiatives, this paper presents a tentative framework for developing professionalism, centered on building a sense of vocation and responsibility in bankers.

This study examines the linear correlation between discretionary accruals (corporate accruals for the purpose of this study) and corporate governance in Bangladesh. The behavior of corporate accruals is explained by corporate governance variables such as board independence, dominant personality, board size, institutional ownership, general public ownership and external auditor. A statistically significant relationship is observed between corporate accruals and general public ownership, which would indicate the existence of an agency problem between shareholders and corporate management. Corporate accruals are not dependent on corporate governance variables but rather on the mindset of corporate managers. Management is in a unique position to produce fraudulent financial statements and the frequency of managerial opportunism in corporate financial reporting in Bangladesh is very high. Corporate boards should therefore be on their guard and employ an active and proactive approach so that shareholders are provided accurate information. It is disastrous for the marginal shareholders when directors themselves exercise opportunism. An ethical, decision-making environment can replace profit-driven decision making and root out the reprehensible practices (information asymmetry) that certain businessmen like to adopt. The findings of this study will help policy planners, regulators, researchers, professional accountants, financial analysts and other interested parties to formulate their own agenda to prevent and reduce managerial opportunism in the Bangladesh corporate sector.

This study examines the effect of pricing policy on firm performance in Nigeria, using data from 101 non-financial companies listed on the Nigerian Stock Exchange (NSE) in 2013. The cross-sectional data were obtained from the annual reports of the sampled firms and were analysed by means of regression modelling. The results revealed that cost of sales and company objectives both have a significant positive effect on return on assets. As for the control variables, the impact of market demand and availability of a close substitute also have a significant positive effect on return on assets, while the impact of the market segment, the macroeconomic trend and consumer perception are all statistically insignificant. These results suggest that an effort should be made to reduce production costs in order to maximize profit.

This study examines the effect of pricing policy on firm performance in Nigeria, using data from 101 non-financial companies listed on the Nigerian Stock Exchange (NSE) in 2013. The cross-sectional data were obtained from the annual reports of the sampled firms and were analysed by means of regression modelling. The results revealed that cost of sales and company objectives both have a significant positive effect on return on assets. As for the control variables, the impact of market demand and availability of a close substitute also have a significant positive effect on return on assets, while the impact of the market segment, the macroeconomic trend and consumer perception are all statistically insignificant. These results suggest that an effort should be made to reduce production costs in order to maximize profit.

espanolEste articulo se centra en la medicion de la calidad de la gestion corporativa mediante la combinacion de una serie de estadisticos relativos a los devengos discrecionales. El objetivo es evaluar la calidad de la gestion en una serie de paises asiaticos: Malasia, Indonesia, Tailandia, Singapur, Hong-Kong, Japon y China. Se utiliza el concepto de flujo de caja libre, el modelo de Kothari-Jones, ocho estadisticos descriptivos y una escala de siete puntos para cada estadistico. Los resultados obtenidos muestran que la mejor calidad en la gestion tiene lugar en Japon (50 puntos), seguido de Tailandia (44), Singapur (38), Malasia (35), China (27), Hong Kong (21) e Indonesia (9) EnglishThis study focuses on the measurement of the quality of corporate management by combining a number of descriptive statistics of corporate accruals. The objective is to evaluate the quality of management in certain Asian countries, namely Malaysia, Indonesia, Thailand, Singapore, Hong Kong, Japan and ...

The debate on the impact of corporate governance mechanism on earnings management remains inconclusive. The current paper explored the use of Two Stage Least Square (2SLS) estimation techniques to examine the relationship between the two constructs based on data sourced from listed companies on the floor of the Nigerian Stock Exchange between 2012 to 2016. We excluded financial industry data based on the peculiarity of the sector’s annual financial reporting system. Our results reveal that at best the relationship between corporate governance code and earnings management is mixed. In specific, it shows that governance code exerts negative influence on earnings management, while a positive relationship was observed to exist between earnings management and Insiders ownership. It was also noted that board independence and auditors’ independence has little or no effect on earnings management. The study therefore recommend that in order to curb earnings management practices, governance c...

The aim of this study is to examine the factors that influence companies to disclose voluntary information in their annual reports of Textile Manufacturing Companies in Bangladesh. The study is used ordinary least squares (OLS) regression model to examine the relationship between dependent variable and independent variables. The factors are proportion of independent non-executive directors (INDs), board size, board audit committee, ownership structure, Profitability and firm size. The extent of voluntary disclosure level is measured by using 68 items of information. Data have been taken from annual reports of 21 listed Textile Manufacturing Companies in DSE of Bangladesh-2010. The result shows a positive association between board size and voluntary disclosure and also total assets with voluntary disclosure. In contrast, the extent of voluntary disclosure is negatively related to the ownership structure.

This study examines the linear relationship between corporate attributes and corporate accruals (discretionary accruals) in Bangladesh. The behaviour of corporate accruals is explained by corporate attributes such as asset size, turnover, earnings per share, number of shareholders, year of listing, international link of audit firm, ownership structure, internationality, market category, and leverage. A statistically significant relationship is observed between corporate accruals and asset size. We also observed inconsistent growth of inventory, faster growth of accounts receivable with an overvaluation of fixed assets reported by probe committee. Indeed, corporate accruals are not dependent on corporate attributes but rather on the mindset of the corporate manager. Management is in a unique position to produce fraudulent financial statements. The study suggests a number of measures including the establishment of an Institute of Chartered Surveyor of Bangladesh (ICSB), the introduction of audit reviews, the updating of corporate governance guidelines, increasing the effectiveness of board independence, and the strengthening institutional setting, in order to protect the rights of stakeholders, especially marginal shareholders.

Purpose: The main aim of this work is to analyse if 2008 financial crisis had impact on earnings management. We compare two countries with different legal forces in terms of quality of accounting to see the differences in firm’s involvement in earnings management. Finally we analyse which determinants impact management of results. Design/methodology/approach: This study focus on Portuguese and UK listed firms from a large period, 2004 till 2014. We first use the Kothari, Leone & Wasley model (2005) to calculate the discretionary accruals, a proxy of earnings management. Then we analyse the impact of six determinants on earnings management. Findings: Findings suggest that financial crisis had impact on firms’ tendency to manage financial results. Country effect is not statistically significant, even if the Portuguese and UK firms’ propensity to manage earnings is singular. Finally, firm’s size and indebt are two relevant characteristics to explain earnings management. Originality/val...

The debate on the impact of corporate governance mechanism on earnings management remains inconclusive. The current paper explored the use of Two Stage Least Square (2SLS) estimation techniques to examine the relationship between the two constructs based on data sourced from listed companies on the floor of the Nigerian Stock Exchange between 2012 to 2016. We excluded financial industry data based on the peculiarity of the sector’s annual financial reporting system. Our results reveal that at best the relationship between corporate governance code and earnings management is mixed. In specific, it shows that governance code exerts negative influence on earnings management, while a positive relationship was observed to exist between earnings management and Insiders ownership. It was also noted that board independence and auditors’ independence has little or no effect on earnings management. The study therefore recommend that in order to curb earnings management practices, governance c...

This study empirically examines the quantum of corporate disclosure and its association with corporate attributes, such as, age, size, profitability, leverage, listing status, shareholding pattern, audit firm, and residential status of a company. It is based on a sample of 50 ...

The debate on the impact of corporate governance mechanism on earnings management remains inconclusive. The current paper explored the use of Two Stage Least Square (2SLS) estimation techniques to examine the relationship between the two constructs based on data sourced from listed companies on the floor of the Nigerian Stock Exchange between 2012 to 2016. We excluded financial industry data based on the peculiarity of the sector’s annual financial reporting system. Our results reveal that at best the relationship between corporate governance code and earnings management is mixed. In specific, it shows that governance code exerts negative influence on earnings management, while a positive relationship was observed to exist between earnings management and Insiders ownership. It was also noted that board independence and auditors’ independence has little or no effect on earnings management. The study therefore recommend that in order to curb earnings management practices, governance c...

Income smoothing refers to the use of accounting techniques to level out net income fluctuations from one period to the next. Companies indulge in this practice to manipulate the earnings over the period in order to lower the level of uncertainty. The companies with constant earnings attract more investors as they are willing to pay more prices for company's stock. This study examine the presence of artificial income smoothing in 64 Shari'ah compliant companies listed in the financial market of Pakistan for the period 2008-2015. The study also takes into consideration the concept of income smoothing from an Islamic perspective. To achieve the study's objectives, Eckel's index model is used. The study found that 34 percent of the companies are non-smoothers and 66 percent of the companies are smoothers in pooled sample. Among high market capitalized 32 companies, 37.5 percent of the companies are non-smoothers and 62.5 percent are smoothing companies. In 32 low market capitalized companies, 31 percent companies are non-smoothing and 69 percent companies are practicing income smoothing.

This research attempts to analyze the relationship between agency, control and corporate governance attributes for a sample of 267 firms listed on the Pakistan Stock Exchange (PSX) from 2005 to 2008. The results show that a) Pakistani listed firms are facing high agency costs problems in contrast to established markets. b) Factors are observed important to having strong effect on mitigating agency costs levels: corporate dividend policy, degree of board independence, and institutional ownership. c) Corporate governance factors reduce discretionary expenditure ratio, increase assets utilization ratio and free cash flow ratio. d) Control variables increases the asset utilization ratio and decreases the free cash flow and increases the managers’ performance (Tobin’s Q ratio). e) Ownership attributes regulate free cash flow and decrease the discretionary expenditure ratio. The outcomes of this research lead to the proposed use of recommended governance, control and ownership attributes ...

This study examines the linear relationship between corporate attributes and corporate accruals (discretionary accruals) in Bangladesh. The behaviour of corporate accruals is explained by corporate attributes such as asset size, turnover, earnings per share, number of shareholders, year of listing, international link of audit firm, ownership structure, internationality, market category, and leverage. A statistically significant relationship is observed between corporate accruals and asset size. We also observed inconsistent growth of inventory, faster growth of accounts receivable with an overvaluation of fixed assets reported by probe committee. Indeed, corporate accruals are not dependent on corporate attributes but rather on the mindset of the corporate manager. Management is in a unique position to produce fraudulent financial statements. The study suggests a number of measures including the establishment of an Institute of Chartered Surveyor of Bangladesh (ICSB), the introduction of audit reviews, the updating of corporate governance guidelines, increasing the effectiveness of board independence, and the strengthening institutional setting, in order to protect the rights of stakeholders, especially marginal shareholders.

This paper examines two types of earnings management practices, the techniques employed, the motives behind the practices and the likely good, bad or ugly implications of each. The examination and analysis of this study indicates that earnings management practices based on manager's personal motives is the ugliest with the worst negative implication. However, the result of the analysis had provided insight that improved disclosure by both managers and management will reduce the risk of bad or ugly practices. It also provided an insight for future research on the implications of various motives behind earning management practices highlighted in the paper.

This study explores the influence of corporate attributes on market capitalization, based on the potential relationships between corporate attributes, corporate disclosure, and market capitalization. The study focused on non-financial listed companies in Bangladesh and uncovered several significant influences of corporate attributes, such as asset size, turnover, shareholders, and internationality, on market capitalization. This contribution provides new insights into corporate attributes and market capitalization, and suggests that existing and potential investors should assess corporate attributes while making investment decisions.

This study investigates the tax non-compliance activity among Malaysian companies which are under tax holiday incentives known as pioneer status companies. For the purpose of tax calculation, statutory income of pioneer status companies were exempted up to 100 percent result in a lower or zero tax payable for these companies.

This study examined the relationship between ownership structure and performance of listed non-financial firms in Nigeria. Secondary data on managerial ownership, ownership concentration, foreign ownership, institutional ownership, Tobin q, return on assets, return on equities, and earnings per shares were collected from forty (40) sampled firms. The data were analyzed using canonical correlation and the findings showed that managerial and foreign ownerships are the dominant ownership structures while Tobin q, EPS, and ROA are the dominant performance measures. The study also found that ownership concentration, foreign ownership, and institutional ownership are positively correlated with firm performance, while managerial ownership is negatively correlated with firm performance. The study recommended that listed non-financial firms should encourage foreign investments in their firms and rewards performing managers with shares in the firm.  

El objetivo del estudio consiste en analizar la calidad de la información financiera de las empresas españolas, comparando las empresas familiares y las no familiares, y relacionando dicha calidad con las prácticas de gobierno corporativo. Para alcanzar este objetivo se analizó una muestra de 650 empresas españolas durante el período 2011-2016. Con base en la teoría de la agencia y en la literatura sobre la riqueza socioemocional, los resultados muestran una mayor calidad de la información financiera en las empresas familiares, relación que se ve reforzada por los factores de gobierno corporativo. Nuestros resultados son consistentes con la investigación previa y con las premisas de la teoría de agencia, que indican menores asimetrías de información entre propietarios y gestores en el singular contexto de las empresas familiares. Además, nuestro trabajo proporciona evidencia empírica de que la participación de las mujeres en el consejo de administración contribuye a la mayor calidad...

Financial statements are means used by entities to communicate financially related circumstances to interested parties both related to the entity's internal and external entities. There are various types of fraud occur in the companies. Types of fraud cases that often occur are asset misappropriation and fraudulent financial statements. Asset Misappropriation is the kind of  act of fraud committed by using or taking company property for personal gain. Fraudulent financial statements are defined as fraudulent actions committed by the manager of the company which in the form of material misstatement in the financial report for the purpose to attract the investor. The fraud can be financial or non-financial. This study is meant to examine the effect of financial ratios in detecting fraudulent financial statements. The independent variable used in this study consisted of 5 variables: leverage, profitability, asset composition, liquidity and capital turn over. This study used the fin...

The study attempted toexplorethe role of discretionary accrualto conceal the actual earnings as a part of misapplication of flexible area in financial estimate in Indian BSE listed companies.As accruals have always provided a common opportunity to deceive financial statements users where the effect causes the financial statements not to be presented, in all material respects,and so along with the H&C (2002) model for total accruals, the most admired DeAngelo (1986)model has been applied for calculatingdiscretionary accruals as part of the treatment for potential earnings management practices for the study. With the sample of BSE listed (industry wise) top 50 companies in India from 2010-2014, an attempt is made to investigatematerial misstatements issue with respect to industry classification on the basis of service and non-service sectors. It is found thatthe service sector industries are involve in income decreasing earnings management practices while non-service sector industries are in reverse practice.Apart from negative correlation between assets size of the firm and discretionary accruals. It isfoundthat the entities of all sizes are susceptible with aberrant pattern anddespite the fact thatthe large firms are engage in income decreasing earnings management practices, on the contrary the small firms aremore likely involve in income increasing practicesin financial reporting of service or non-service sector under which it is operating.

The aim of this study is to examine the factors that influence companies to disclose voluntary information in their annual reports of Textile Manufacturing Companies in Bangladesh. The study is used ordinary least squares (OLS) regression model to examine the relationship between dependent variable and independent variables. The factors are proportion of independent non-executive directors (INDs), board size, board audit committee, ownership structure, Profitability and firm size. The extent of voluntary disclosure level is measured by using 68 items of information. Data have been taken from annual reports of 21 listed Textile Manufacturing Companies in DSE of Bangladesh-2010. The result shows a positive association between board size and voluntary disclosure and also total assets with voluntary disclosure. In contrast, the extent of voluntary disclosure is negatively related to the ownership structure.

The aim of this study is to examine the factors that influence companies to disclose voluntary information in their annual reports of Textile Manufacturing Companies in Bangladesh. The study is used ordinary least squares (OLS) regression model to examine the relationship between dependent variable and independent variables. The factors are proportion of independent non-executive directors (INDs), board size, board audit committee, ownership structure, Profitability and firm size. The extent of voluntary disclosure level is measured by using 68 items of information. Data have been taken from annual reports of 21 listed Textile Manufacturing Companies in DSE of Bangladesh-2010. The result shows a positive association between board size and voluntary disclosure and also total assets with voluntary disclosure. In contrast, the extent of voluntary disclosure is negatively related to the ownership structure.

Corporate accounting scandal is not a new phenomenon and it is the outcome of corporate accruals i.e., accruals by management choice. This study investigated the use of corporate accruals in the financial statements of the listed companies in Dhaka Stock Exchange (DSE) through segregating total accruals into corporate (discretionary) and accounting (non-discretionary) accruals. The average rate of corporate accruals was 35 percent and in many cases, cash flow from operation exceeded the net income, the growth in accounts receivable was faster than sales growth, and inventory growth was not consistent with sales growth. In this context, this study may create awareness of the risk factors of corporate accruals among external users’ of accounting information especially analysts, regulator, policy makers, existing and potential shareholders, lenders, trade creditors, external auditors, researchers, financial advisors, and stock brokers. Consequently, it may reduce the use of management ...

This study investigates the tax non-compliance activity among Malaysian companies which are under tax holiday incentives known as pioneer status companies. For the purpose of tax calculation, statutory income of pioneer status companies were exempted up to 100 percent result in a lower or zero tax payable for these companies. Given this unique characteristic of the incentive, this paper explores the possibility of companies to manage earnings by shifting their income through certain periods to minimize their tax ...

This study examines the linear correlation between discretionary accruals (corporate accruals for the purpose of this study) and corporate governance in Bangladesh. The behavior of corporate accruals is explained by corporate governance variables such as board independence, dominant personality, board size, institutional ownership, general public ownership and external auditor. A statistically significant relationship is observed between corporate accruals and general public ownership, which would indicate the existence of an agency problem between shareholders and corporate management. Corporate accruals are not dependent on corporate governance variables but rather on the mindset of corporate managers. Management is in a unique position to produce fraudulent financial statements and the frequency of managerial opportunism in corporate financial reporting in Bangladesh is very high. Corporate boards should therefore be on their guard and employ an active and proactive approach so that shareholders are provided accurate information. It is disastrous for the marginal shareholders when directors themselves exercise opportunism. An ethical, decision-making environment can replace profit-driven decision making and root out the reprehensible practices (information asymmetry) that certain businessmen like to adopt. The findings of this study will help policy planners, regulators, researchers, professional accountants, financial analysts and other interested parties to formulate their own agenda to prevent and reduce managerial opportunism in the Bangladesh corporate sector.

This paper is the first to apply the econometric Chow model to determine the impact of the 2007-2008 financial crisis on the Lebanese banking sector through testing for structural breaks in their performance from the period immediately preceding the crisis until after the crisis hit. This involved the use of thirteen financial ratios for all the Lebanese commercial banks operating in Lebanon taken from the following four categories: profitability, liquidity, credit quality and capitalization. For comparison purposes, the chosen model was also applied to the 386 leading U.S. banks in terms of assets. A positive structural break was detected in the overall performance of Lebanese banks for profitability, liquidity and credit quality ratios. Conversely, U.S. banks showed a negative structural break in almost all of the selected ratio categories. Even though Lebanese banks showed a certain resilience, not to say improvement, in response to the crisis, they continue to be at risk due to their vulnerability to a number of macro, socio and political factors.

El objetivo del estudio consiste en analizar la calidad de la información financiera de las empresas españolas, comparando las empresas familiares y las no familiares, y relacionando dicha calidad con las prácticas de gobierno corporativo. Para alcanzar este objetivo se analizó una muestra de 650 empresas españolas durante el período 2011-2016. Con base en la teoría de la agencia y en la literatura sobre la riqueza socioemocional, los resultados muestran una mayor calidad de la información financiera en las empresas familiares, relación que se ve reforzada por los factores de gobierno corporativo. Nuestros resultados son consistentes con la investigación previa y con las premisas de la teoría de agencia, que indican menores asimetrías de información entre propietarios y gestores en el singular contexto de las empresas familiares. Además, nuestro trabajo proporciona evidencia empírica de que la participación de las mujeres en el consejo de administración contribuye a la mayor calidad...

This study explores the influence of corporate attributes on market capitalization, based on the potential relationships between corporate attributes, corporate disclosure, and market capitalization. The study focused on non-financial listed companies in Bangladesh and uncovered several significant influences of corporate attributes, such as asset size, turnover, shareholders, and internationality, on market capitalization. This contribution provides new insights into corporate attributes and market capitalization, and suggests that existing and potential investors should assess corporate attributes while making investment decisions.