Accruals quality and the cost of debt: Evidence from Vietnam

Le, Ha Thi Thu; Vo, Xuan Vinh; Vo, Thi Thuc

doi:10.1016/j.irfa.2021.101726

Cited by 18 publications

(15 citation statements)

References 38 publications

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“…Prevost et al. (2008) and Le et al. (2021) provide evidence that creditors are sophisticated users of accounting information and able to see through managers' attempts to opportunistically influence earnings perceptions.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Prior research (Healy and Wahlen, 1999;Dechow and Skinner, 2000;Beneish, 2001) documents that managers use accruals and manage earnings by changing accounting policies to alter financial report and delude stakeholders about the underlying economic performance. Prevost et al (2008) and Le et al (2021) provide evidence that creditors are sophisticated users of accounting information and able to see through managers' attempts to opportunistically influence earnings perceptions. Hence, the authors show that creditors penalize firms which use accounting manipulations by inflicting a higher cost of debt.…”

Section: Literature Reviewmentioning

confidence: 99%

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The effect of debt maturity structure on earnings management strategies

Draief

Chouaya²

2022

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PurposeThe aim of this study is to investigate whether debt maturity matters for the choice of earnings management strategy (i.e. accruals earnings management and real earnings management).Design/methodology/approachThe sample involves 486 American listed firms extracted from fortune 1,000 over the period 2006–2014. Panel data regression models are employed to empirically test the impact of short-term debt and long-term debt on manager's choice of earnings management form. The generalized least square technique is applied to estimate the parameters of the regression models.FindingsThe results show that managers are more likely to manage earnings through real activities and reduce their use of accruals earnings management once short debt is increasing because the latter induces heavy lender's scrutiny. The managers move hence to real earnings management due to a lower possibility of being discovered. Moreover, the results reveal a simultaneous use of accruals earnings management and real earnings management for firms with high long-term debt. This finding highlights that long-term debt does not produce regular lender's enforcement allowing managers to use both earnings management techniques to reach earnings targets.Research limitations/implicationsThis research has two limitations. Like many other studies, the measure of discretionary accruals is subject to measurement errors. Moreover, the sample exclusively involves large firms extracted from Fortune 1,000. Therefore, the attained results may be not available for small and medium firms.Practical implicationsThe findings have implications for both researchers and lenders. For researchers, the present work points out that the decision about the debt maturity structure is crucial for all managers because they establish their earnings management policy accordingly. For lenders, the findings imply that increasing scrutiny effectively constrains accounting manipulations but does not eliminate earnings management activities altogether. The managers move to another earnings management strategy (i.e. real earnings management). This evidence may support the lenders and the creditors in their decision-making processes.Originality/valueThis paper adds to the accounting literature by providing new and interesting evidence on the role of debt maturity on the trade-off between the earnings management tools. Prior studies provided mixed finding for the issue of earnings management in levered firms. The findings of this study should be viewed as a first step to understand the mixed results on this issue. While most papers focus on one earnings management form when they examine the earnings management in levered firms, the authors highlight the impact of debt on both accruals and real earnings management simultaneously.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

The effect of debt maturity structure on earnings management strategies

Draief

Chouaya²

2022

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“…Variabel size of business juga dikatakan berpengaruh terhadap biaya utang. Menurut Le et al,(2021) perusahaan yang besar dianggap memiliki risiko keuangan yang lebih rendah sehingga diharapkan memiliki pengaruh negatif terhadap biaya utang. Berbeda halnya dengan Reza Ashkhabi et al,(2015) yang mengatakan bahwa semakin besar ukuran perusahaan maka tingkat pertumbuhan perusahaan juga semakin tinggi dengan demikian memiliki kecenderungan untuk menggunakan sumber dana eksternal yang lebih besar yang berakibat pada biaya utang yang tinggi.…”

Section: Business Age Leverage Ratio Net Cash From Operating Activiti...unclassified

“…Penelitian sebelumnya oleh Abdussaid et al,(2021) melihat adanya pengaruh negatif penghindaran pajak terhadap biaya utang. Kepemilikan institusional dari hasil penelitian Reza Ashkhabi et al,(2015) ; Meiriasari,(2017) ; Agustami & Yunanda,(2014) Ashkhabi et al,(2015) berpengaruh positif terhadap biaya utang dimana hal ini berbeda dari hasil penelitian Le et al,(2021). Sedangkan hasil penelitian Kholbadalov, (2012) memaparkan bahwa variabel net cash from operating activities memiliki pengaruh positif terhadap biaya utang.…”

Section: Rerangka Konseptualunclassified

Pengaruh Penghindaran Pajak dan Kepemilikan Institusional terhadap Biaya Utang di Industri Makanan dan Minuman Indonesia

Aurelia

Leon²

2022

ajb

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Praktik penghindaran pajak menjadi perkara yang perlu ditelusuri lebih dalam di Indonesia. Berbeda halnya dengan kepemilikan institusional yang dikatakan dapat mempengaruhi bagaimana kinerja yang dilakukan perusahaan dalam kaitannya terhadap alokasi sumber daya keuangan. Praktik penghindaran pajak yang tinggi dikaitkan dengan biaya utang yang rendah sedangkan adanya proporsi kepemilikan institusional yang besar diharapkan mampu meminimalkan biaya utang. Tujuan dari penelitian untuk melihat pengaruh penghindaran pajak dan kepemilikan institusional terhadap biaya utang. Implikasi penelitian yang telah dilakukan ialah memberikan arahan bagi manajer keuangan untuk mengupayakan peningkatakan pendapatan sebelum pajak perusahaan atau menjual asset perusahaan yang tidak produktif, penggunaan utang yang optimal, peningkatan ukuran perusahaan dari peningkatan aset yang dimiliki perusahaan, serta meningkatkan produktivitas perusahaan. Variabel independen dalam penelitian ialah penghindaran pajak dan kepemilikan institusional. Variabel dependen adalah biaya utang sedangkan variabel kontrol terdiri atas usia perusahaan, rasio utang, kas dari aktivitas operasional, ukuran perusahaan, dan rasio lancar. Penelitian dilakukan dengan mengumpulkan data dari 28 perusahaan sub-sektor makanan dan minuman di Indonesia. Hasil penelitian memaparkan penghindaran pajak, rasio utang, dan ukuran perusahaan berpengaruh negatif sedangkan usia perusahaan berpengaruh positif terhadap biaya utang. Kebaruan dari penelitian ini ialah menambahkan rasio lancar sebagai variabel kontrol yang dinilai terdapat kaitannya dengan biaya utang suatu perusahaan

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“…(Kovermann, 2018) menguji penghindaran pajak dan risiko pajak terhadap biaya utang. (Le et al, 2021) menguji kualitas akrual terhadap biaya utang. (Yeh et al, 2019) menguji tanggung jawab sosial terhadap biaya ekuitas dan biaya utang.…”

Section: Pendahuluanunclassified

Biaya Modal Perusahaan di Indonesia: Tanggung Jawab Sosial dan Tata Kelola Perusahaan

Firmansyah

2021

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The high capital cost indicates the company's risk to obtain funding from debt and equity. The test in this study aims to prove the association between corporate social responsibility and corporate governance with the cost of capital. This study employs data sourced from financial reports and annual reports of the listed companies on the Indonesia Stock Exchange, downloaded from www.idx.co.id. In addition, this research data also employs stock price information sourced from finance.yahoo.com. The sample selection in this study used purposive sampling with a total sample of 260 observations from 65 companies from 2016 to 2019. The hypothesis test in this study used multiple linear regression analysis for panel data. This study concludes that corporate governance is positively associated with the cost of capital, while corporate social responsibility is negatively associated with the cost of capital. This study suggests that Indonesia's capital market supervisory authority needs to improve its governance policies and governance oversight mechanisms for companies listed on the Indonesia Stock Exchange.

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Accruals quality and the cost of debt: Evidence from Vietnam

Cited by 18 publications

References 38 publications

The effect of debt maturity structure on earnings management strategies

The effect of debt maturity structure on earnings management strategies

Pengaruh Penghindaran Pajak dan Kepemilikan Institusional terhadap Biaya Utang di Industri Makanan dan Minuman Indonesia

Biaya Modal Perusahaan di Indonesia: Tanggung Jawab Sosial dan Tata Kelola Perusahaan

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