Audit Committee Effectiveness and Earnings Management Among Publicly Listed Firms in Kenya

Kapkiyai, Collins; Cheboi, Josephat; Komen, Joyce

doi:10.33215/sjom.v3i2.292

Cited by 5 publications

(8 citation statements)

References 64 publications

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“…Thus, UAE companies enhance the requirement of audit committee expertise and improve its role to detect management misbehaviour. This result is in line with Juhmani (2017) and Kapkiyai et al (2020) who found that audit committee expertise is negatively associated with earnings management.…”

Section: Multiple Regression Resultssupporting

confidence: 89%

“…Zábojníková (2016) and Deslandes et al (2020) reported that an audit committee's number of meetings is positively associated with firm performance. Kapkiyai et al (2020) reported that a high level of audit committee meetings indicates a high level of activeness against managers' misconduct. According to the Corporate Governance code of UAE, an audit committee should meet at least 4 times a year.…”

Section: Audit Committee Meetingsmentioning

confidence: 99%

“…In a recent study, Kapkiyai et al (2020) stated that an expert audit committee increases the audit committees' effectiveness and is an effective mechanism to constrain earnings management. The Code of Corporate Governance in UAE stipulates that an audit committee should consist of at least three members, and one of them should be a financial or an accounting expert.…”

Section: Audit Committee Expertisementioning

confidence: 99%

“…Such alternative methods may strengthen the findings of the study. Forth, although earnings management is a broad concept, the current study used discretionary accruals as a proxy of earnings management following Nelwan and Tansuria (2019) and Kapkiyai et al (2020). Future studies may apply other proxies as an indicator of earnings management, such as real earnings management.…”

Section: Conclusion Practical Implications and Future Researchmentioning

confidence: 99%

“…There are many the reasons why managers of companies manage their corporate earnings. Among others, they are motivated to increase their personal benefits, avoid penalties for poor performance, increase performance-based compensation and meet financial analysts' expectations (Bamahros & Wan-Hussin, 2015;Kapkiyai et al, 2020). Although accruals-based earnings management is allowed within the law over time, it has developed into fraudulent and misleading financial reporting incidents (Bamahros & Wan-Hussin, 2015).…”

Section: Introductionmentioning

confidence: 99%

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Royal Family Members and Corporate Governance Characteristics: The Impact on Earnings Management in UA

Almuzaiqer

Fatima

Ahmad

2022

IJBS

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This study examines the association between Royal family members on the board of directors and earnings management in the United Arab Emirates (UAE). Panel data was sourced from the annual and corporate governance reports of companies listed in two leading markets in the UAE: Abu Dhabi Exchange Security (ADX) and Dubai Financial Market (DFM). Final data resulted in 437 observations for the period from 2011 to 2018. The findings of this study concluded that Royal family members on the board of UAE listed companies is negatively associated with earnings management. This study provides evidence of the role played by elite groups (Royal family members) in the UAE in enhancing the role played by the board of directors. The study also found that board meetings and audit committee meetings are positively associated with earnings management, while audit committee expertise and profitability negatively associated with earnings management. However, board size, board independence, audit committee independence, firm size and firm leverage had insignificant association with earnings management. The paper contributes to the existing theory and empirical evidence of how internal governance mechanisms add value to the company by reducing earnings management and enhancing the quality of financial reporting.

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Section: Multiple Regression Resultssupporting

confidence: 89%

Section: Audit Committee Meetingsmentioning

confidence: 99%

Section: Audit Committee Expertisementioning

confidence: 99%

Section: Conclusion Practical Implications and Future Researchmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Royal Family Members and Corporate Governance Characteristics: The Impact on Earnings Management in UA

Almuzaiqer

Fatima

Ahmad

2022

IJBS

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Earnings Management Ethicality and Application in the Kenyan Public Sector: A Critical Review

Odek

Kalundu

2022

Preprint

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Purpose The purpose of this study was to critically review various empirical literature in regard to earnings management ethicality and its application in public sector organizations in the Kenyan context with the aim of identifying the gaps and areas for further research. Methodology: The study applied a semi-systematic or narrative review approach by relying on previous publications (2008–2022) on the topic under discussion. This current study applied thematic/content analysis to form opinions about the deductions from the study. Findings: Results shows key motivators toward earnings management to include; managers engaging in earnings management as a result of being sure of not being observed or detected by the public, avoiding reporting losses or avoiding showing any decreases in the reported earnings, meeting analyst forecasts, avoiding payment of higher taxes, to enable access to debt, contracting motivations, and to achieve bonuses tied to performance. Moreover, findings had it that there is no consensus in regard to the ethicality of earnings management. Hence legitimate and illegitimate management of earnings. The study also evidenced that both accrual and real earnings management techniques are applied by managers in the company’s economic reports. Additionally, there are mixed results as to whether creative accounting is practiced in the public sector or not, and with reference to Kenya, no studies on earnings management ethicality has ever been conducted. Implications: The findings from the many empirical studies reviewed herein are therefore helpful in addressing the research gaps identified. Therefore being the limited research on earnings management ethicality in Kenya and globally, it is recommended that scholars to still conduct further studies on earnings management and especially in the public sector firms. Value of the Study: It contributes to strategy makers like the Kenya Accounting Standards Board in the formulation and implementation of accounting principles. It also forms a basis for further research in the management of earnings and its ethicality among public sector firms. That is, no other study had been done in Kenya and just a few studies have been carried out globally.

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Tata Kelola Perusahaan dan Manajemen Laba Riil pada Perusahaan Manufaktur di Bursa Efek Indonesia (BEI)

Mardianto,

Trisnawati

2022

SAKI

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This study aims to examine the effect of the characteristics of the board of directors and audit committee on real earnings management. Three measurements are used to measure real earnings management, namely abnormal cash flow from operations, abnormal discretionary expenses, and abnormal production costs. Company management can manipulate operational activities such as sales, reduce discretionary costs and manipulate production levels excessively. The object under study is the annual reports of manufacturing companies from 2017 to 2021 which are listed on the Indonesia Stock Exchange. The data collected will be processed with the help of Eviews software. The data analysis method used is descriptive statistical analysis, panel data regression test, and hypothesis testing. The results of this study prove that the audit committee size variable has a significant positive effect on real earnings management, while the board of directors size variable, board of directors independence, board of directors meetings, audit committee independence, audit committee meetings, and audit committee expertise do not affect real earnings management.

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Audit Committee Effectiveness and Earnings Management Among Publicly Listed Firms in Kenya

Cited by 5 publications

References 64 publications

Royal Family Members and Corporate Governance Characteristics: The Impact on Earnings Management in UA

Royal Family Members and Corporate Governance Characteristics: The Impact on Earnings Management in UA

Earnings Management Ethicality and Application in the Kenyan Public Sector: A Critical Review

Tata Kelola Perusahaan dan Manajemen Laba Riil pada Perusahaan Manufaktur di Bursa Efek Indonesia (BEI)

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