scholarly journals The Effect of Ownership Structure on Earnings Management Practices Toward Achieving the Real Comprehensive Income “An Applied Study on the Listed Companies in Libyan Stock Market”

2020 ◽  
Vol 2020 ◽  
pp. 1-11
Author(s):  
Moutaz A. Kablan
Keyword(s):  
Stock Market ◽  
Earnings Management ◽  
Ownership Structure ◽  
Management Practices ◽  
Listed Companies ◽  
The Real ◽  
Comprehensive Income ◽  
Applied Study

Earnings management and audit quality at Damascus securities exchange: Does managerial ownership matter?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Zukaa Mardnly ◽  
Zinab Badran ◽  
Sulaiman Mouselli
Keyword(s):  
Earnings Management ◽  
Ownership Structure ◽  
Management Practices ◽  
Audit Quality ◽  
Emerging Market ◽  
Ordinary Least Squares ◽  
Managerial Ownership ◽  
External Audit ◽  
Content Type ◽  
The Impact

Purpose The purpose of this study is to examine the individual and combined effect of managerial ownership and external audit quality, as two control mechanisms, on earnings management. Design/methodology/approach This study applies ordinary least squares estimates on fixed-time effects panel regression model to test the impact of the investigated variables on earnings management for the whole population of banks and insurance companies listed at Damascus Securities Exchange (DSE) during the period from 2011 to 2018. Findings The empirical evidence suggests a negative non-linear relationship between managerial ownership (as proxied by board of directors’ ownership) on earnings management. However, neither audit quality nor the simultaneous effect of the managerial ownership and audit quality (Big 4) affects earnings management. Research limitations/implications DSE is dominated by the financial sector and the number of observations is constrained by the recent establishment of DSE and the small number of firms listed at DSE. In addition, the non-availability of data on executive directors’ and foreign ownerships restrict our ability to uncover the impact of different dimensions of ownership structure on earnings management. Practical implications First, it stimulates investors to purchase stocks in financial firms that enjoy both high managerial ownership, as they seem enjoying higher earnings quality. Second, the findings encourage external auditors to consider the ownership structure when choosing their clients as the financial statements’ quality is affected by this structure. Third, researchers may need to consider the role of managerial ownership when analyzing the determinants of earnings management. Originality/value It fills the gap in the literature, as it investigates the impact of both managerial ownership and audit quality on earnings management in a special conflict context and in an unexplored emerging market of DSE. It suggests that managerial ownership exerts a significant role in controlling earnings management practices when loose regulatory environment combines conflict conditions. However, external audit quality fails to counter earnings management practices when conditions are fierce.

scholarly journals Surplus Free Cash Flow, Stock Market Segmentations and Earnings Management: The Moderating Role of Independent Audit Committee

2020 ◽  
pp. 097215092093406
Author(s):  
Ahmad A. Toumeh ◽  
Sofri Yahya ◽  
Azlan Amran
Keyword(s):  
Stock Market ◽  
Earnings Management ◽  
Cash Flow ◽  
Audit Committee ◽  
Management Practices ◽  
Free Cash Flow ◽  
The Body ◽  
Moderating Role ◽  
Independent Audit

Management engages in earnings manipulation for different reasons. This article argues that low-growth firms with high free cash flow will opt for income-increasing earnings management in order to obscure the low profits derived from their investments in negative net present value (NPV) projects. On the other hand, we argue that the listed companies might be interested in being listed in the first market due to its privileges and to preserve the competitiveness, through managing their earnings upwardly, so that they can satisfy the condition of achieving a particular earnings limit. This article should advance the body of earnings management literature in the Jordanian context by examining the effect of the moderating role of an independent audit committee (IAC) in the association between surplus free cash flow (SFCF) and income-increasing discretionary accruals (DAC). Further, this is the initial empirical attempt to investigate the moderation effect of IAC between stock market segmentations (SMS) and positive DAC. The results of this current study offer original and beneficial information for the Jordanian government and other countries with a similar institutional environment because the study promotes the application of applying IAC as an efficient tool to constrain management behaviour towards manipulation of the accruals. On top of that, this research offers information concerning the prevailing situation of earnings management practices and corporate governance in Jordan, in which shareholders, local and international investors, policymakers, regulators and academic researchers are interested. Finally, panel data analyses and various statistical techniques are employed to derive conclusions.

scholarly journals THE IMPACT OF OWNERSHIP STRUCTURE IN PROMOTING CONTINUITY - APPLIED STUDY OF A SAMPLE ON LISTED COMPANIES IN IRAQI STOCK EXCHANGE

2021 ◽  
Vol 11 (2) ◽  
Author(s):  
Amer Mohamed Salman Al-Janabi ◽  
Hassnain Kadhem Ojah
Keyword(s):  
Ownership Structure ◽  
Stock Exchange ◽  
Research Problem ◽  
Listed Companies ◽  
Specific Class ◽  
Control Environment ◽  
Financial Reports ◽  
Applied Study ◽  
Corporate Governance Mechanisms ◽  
The Impact

The research aims to diagnose the property structure for a sample of listed companies shares in the Iraq Stock Exchange as well as determining the ability of the property structure in the continuity of the company, as the research problem is the effect of the structure of ownership of the corporate sample study in promoting continuity of companies? The research assumed a significant impact of the structure of ownership in enhancing the continuity of the sample of the research, the research reached that the diversity of the property structure is centralized through it is part of corporate governance mechanisms, as it is responsible for specific policies and decisions, which in turn has a solid control environment As well as the powers of the protection of shareholders, as well as the diversity of ownership structure leads to the protection of the interests of economic unity and the interests of all equity holders through that decisions do not have a specific class interests at the expense of the rest of the stock campaign, as well as non-continuity It is the results of many behaviors and non-right decisions and decisions of the ownership structure. The discovery of those factors and indicators contributes to avoiding non-continuation of the samples of the research sample. Those who have 5% stake through special statements are discriminated with financial reports to clearly identify the diversity of the property structure as well as account monitors should give an indication. The landmarks are clear in their reports and their views are clearly and impressed with regard to the imposition of continuity of economic units listed on the Iraq Stock Exchange.

Earnings Management and Stock Liquidity

2021 ◽  
pp. 66-84
Author(s):  
Hakan Özkaya
Keyword(s):  
Stock Market ◽  
Earnings Management ◽  
Trading Volume ◽  
Management Practices ◽  
Positive Association ◽  
Discretionary Accruals ◽  
Market Liquidity ◽  
Stock Liquidity ◽  
Turnover Ratio ◽  
Liquidity Measures

This chapter tests whether the earnings management practices in Turkey are considered informative or opportunistic by outside investors by examining its effect on stock liquidity. Earnings management is measured by discretionary accruals calculated by two different competing methods. Stock liquidity is also proxied by two different measures: the illiquidity measure of Amihud and the turnover ratio. Amihud's illiquidity measure indicates firms' daily price responses associated with the trading volume and the turnover ratio indicates how many times a stock changes its owner in a year. Relevant control variables are also included in the models. A positive association between earnings management and stock liquidity implies informative earnings management and vice versa. Earnings management is found to be positively associated with stock market liquidity. Results favor the informative earnings management view for Turkish firms and are robust to alternative specifications of earnings management and stock liquidity measures.

Monitoring earnings management in emerging markets

2015 ◽  
Vol 31 (2) ◽  
pp. 86-108 ◽  
Author(s):  
Manel Hessayri ◽  
Malek Saihi
Keyword(s):  
South Africa ◽  
Earnings Management ◽  
United Arab Emirates ◽  
Ownership Structure ◽  
Emerging Market ◽  
Listed Companies ◽  
The Philippines ◽  
Content Type ◽  
Ifrs Adoption ◽  
Emerging Market Countries

Purpose – The purpose of this paper is to examine whether International Financial Reporting Standards (IFRS) adoption complements corporate governance factors (e.g. ownership structure) in monitoring managers’ discretional behavior in an emerging market context. Design/methodology/approach – The paper relies on a sample of listed companies in the United Arab Emirates, Morocco, South Africa and the Philippines during an eight-year period on average (four years of pre-adoption period and four years of post-adoption period). Findings – The authors find no evidence of lower earnings management after the switch to IFRS reporting, suggesting that managerial discretional behavior is insensitive to a firm’s IFRS adoption. However, the authors document effective monitoring role of a firm’s ownership structure on earnings management. More interestingly, institutional investors are effective in constraining earnings management when holding a high level of ownership. Moreover, the effect of blockholders and institutional blockholders varies as their ownership rises following a non-linear pattern. Research limitations/implications – First, the assumption that discretionary accruals are adequate measure of earnings management may be criticized in different ways. Second, the findings, performed on listed companies in the United Arab Emirates, Morocco, South Africa and the Philippines, should be interpreted with caution and cannot be generalized to all emerging market countries. Practical implications – Standards setters and market authorities should be aware of earnings management determinants to set adequate and fitting accounting standards limiting opportunistic behavior of managers and mainly to set up training programs to accounting professionals improving the IFRS implementation. Moreover, considering specific features of firms in emerging market countries related to ownership structure, international investors may rely on such criteria to evaluate firms. Finally, auditors should be aware of different incentives for earnings management in order to be able to detect eventual manipulation of accounting earnings. Originality/value – This paper provides a timely contribution to the continuous debate of the effect of IFRS adoption on earnings management in a poorly exploited setting, emerging market context. When investigating, additionally, the eventual non-linear effect of institutional ownership, block ownership, institutional block ownership and non-institutional block ownership on earnings management, a major contribution is that it brings to light the finding of a differential influence of ownership levels on earnings management.

scholarly journals Earnings Management in Polish Companies

2012 ◽  
Vol 14 (3) ◽  
pp. 137-150 ◽  
Author(s):  
Janusz Brzeszczyński ◽  
Jerzy Gajda ◽  
Tomasz Schabek
Keyword(s):  
Stock Market ◽  
Earnings Management ◽  
Management Practices ◽  
Threshold Value ◽  
Asymmetric Distribution ◽  
Earnings Per Share

This paper presents results of the investigation of a phenomenon known as "earnings management'' (EM) among the companies listed on the Polish stock market. The distribution of earnings per share (EPS) for the stocks around the threshold value of "zero" and the threshold of "recent performance" was analyzed in the period of years 1997-2010. Moreover, the changes of earnings for the stocks, which are suspected to manipulate their earnings, were also investigated. The results, which indicate asymmetric distribution of earnings around the zero threshold along with the relative deterioration of earnings in the year following the period when the companies were suspected to conduct earnings management practices, provide evidence that this phenomenon exists among Polish stock market companies.

scholarly journals The effect of the ownership structure on earnings management practices

2018 ◽  
Vol 15 (4) ◽  
pp. 48-60 ◽  
Author(s):  
Sanaa Maswadeh
Keyword(s):  
Earnings Management ◽  
Ownership Structure ◽  
Management Practices ◽  
Management Practice ◽  
Institutional Ownership ◽  
Foreign Ownership ◽  
Industrial Companies ◽  
Multiple Regression Models ◽  
Controlling Variables ◽  
And Control

The objective of this study is to investigate the effect of the ownership structure, which includes concentration ownership, institutional ownership and foreign ownership in the light of the debt ratio and company size as controlling variables in limiting the earnings management practices of the Jordanian industrial companies for the period 2012–2016. The hypotheses of the study were tested using the multiple regression models. Among the most prominent findings of the study are: the explanatory factor (R2) for the independent and control variables accounts for 38% of the change in the earnings management of the Jordanian industrial companies, moreover, a significant effect of the concentration ownership was found in the limitation of earnings management practices; while, there was no significant influence of institutional ownership and foreign ownership on the earnings management practices in Jordanian industrial companies. Major limitation to this study is the only considered listed industrial Jordanian firms. Thus, the generalization of the results to other sectors and diverse economic conditions and regulations may be constrained. Finally, Jordanian policymaker reform policies motivate companies to increase their interest on concentration ownership structure, as the study showed the significant effect of the concentration ownership in the limitation of earnings management practice.

scholarly journals Corporate Disclosure, Ownership Structure And Earnings Management: The Case Of French-Listed Firms

2015 ◽  
Vol 31 (4) ◽  
pp. 1493 ◽  
Author(s):  
Nadia Lakhal
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Ownership Structure ◽  
Management Practices ◽  
Corporate Disclosure ◽  
Minority Shareholders ◽  
Listed Firms ◽  
Good Corporate Governance ◽  
Management Measures ◽  
The Relationship

The purpose of this paper is to investigate the effect of corporate governance devices on earnings management for French-listed firms. Particularly, it examines the relationship between corporate disclosure practices, ownership structure features and earnings management by French managers. Results show that the relationship between earnings management measures and disclosure scores is negative suggesting that less transparent firms are likely to engage in earnings management practices. The findings also show that families, institutional investors and multiple large shareholders negatively influence earnings management, and hence, act as good corporate governance devices to limit managerial discretion. This paper shed light on the monitoring role of corporate disclosures and ownership structure in the French context where minority shareholders interests are less protected than in common law countries.

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