Earnings management and ownership structure in emerging market

Lassoued, Naima; Attia, Mouna Ben Rejeb; Sassi, Houda

doi:10.1108/mf-11-2015-0312

Cited by 43 publications

(45 citation statements)

References 73 publications

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“…This hypothesis is supported by the supervisory role argument of the majority owner, which minimises the opportunistic behaviour of managers. Through greater and tighter control of majority shareholders, managers have less discretionary power and consequently less incentives to engage in real activities manipulation, suggesting the existence of an alignment of interest between managers and shareholders (Lassoued, Ben Rejeb Attia, & Sassi, 2017). From an empirical viewpoint, Alves (2012) highlighted the importance of ownership structure, mainly managerial ownership and ownership concentration, in constraining the likelihood of earnings management in Portuguese firms.…”

Section: Ownership Structure Features and Real Activities Manipulationmentioning

confidence: 99%

Real earnings management and corporate governance: a study of Latin America

Mellado

Saona

2019

Economic Research-Ekonomska Istraživanja

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This article analyses the impact of ownership structure features and institutional settings on real activities manipulation. The analysis is based on a sample of listed companies in the underexplored Latin American market for the period of 2004-2016. Paneldata-based G.M.M. System Estimation is used in the empirical analysis. The results confirm that the monitoring role of the majority owner is crucial in mitigating managerial opportunistic behaviour. Here, opportunistic behaviour refers to engaging in real activities manipulation that reduces the informative content of financial statements. However, analysis of insider ownership revealed that managers had a negative impact on transparency. We observed that as insider ownership increases, managers engage more actively in real earnings management. We also find that the institutional ownership and the quality of the regulatory system proved to be effective mechanisms in reducing real activities manipulation. ARTICLE HISTORY

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Section: Ownership Structure Features and Real Activities Manipulationmentioning

confidence: 99%

Real earnings management and corporate governance: a study of Latin America

Mellado

Saona

2019

Economic Research-Ekonomska Istraživanja

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“…The study used audit tenure as a proxy for audit quality and found INOWN to be significantly and positively associated with audit quality [82]. Lassoued, Ben Rejeb Attia and Sassi disclosed a positive and significant relationship between INOWN and earning management [35]. However, Mitra, Hossain and Deis established that INOWN and managerial ownership had no significant relationship with audit quality [82].…”

Section: Institutional Ownershipmentioning

confidence: 99%

“…The relationship between INOWN and the quality of financial statement can be explicated by agency theory which asserted that INOWN can enhance monitoring of management in handling the firm by reducing agency clashes between stakeholders and managers, thereby substantially reduce misreporting of financial information and improve the efficacy of supervising financial statement [33]. It is considered that ownership concentration is the most effective tool that ensures the appropriate management of companies in developing markets [34,35]. This is because institutional stakeholders convey the means to manage companies and precisely oversee the directors and handling the management verdicts.…”

Section: Introductionmentioning

confidence: 99%

Impact of Ownership Characteristics on Modified Audit Opinion in Jordan

Alkilani¹,

Hussin²,

Salim³

2019

IJAFRM

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It is well established that ownership characteristics are impacted by the quality of financial reporting. The purpose of this work is to examine the role of ownership characteristics in minimising the prospect of corporates obtaining a modified audit opinion in Jordan. Three ownership characteristics [family ownership (FAOWN), institutional ownership (INOWN) and foreign ownership (FAOWN)] and modified audit opinion were studied. The study used 117 samples of corporates listed on the Amman Stock Exchange (ASE). Logistic regression was employed to analyse the association between the modified audit opinions as a dependent variable and ownership characteristics as independent variables. Ownership characteristics are anticipated to be more successful in improving the quality of financial statement, and thus, reduce the prospect of firm obtaining a modified audit opinion. The analysed results from 2012 to 2016 periods of these corporates in Jordan showed that FAOWN and FOOWN validated this projection. Interestingly, the effect of family and FOOWN improve the quality of financial statement, thereby, reduce the cases of a modified audit opinion. Additionally, the study could not find any association impact between the INOWN and modified audit opinion.

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“…The results of the study (Lassoued, Ben Rejeb Attia, & Sassi, 2017) show that ownership structure has a superior influence to produce financial reporting quality. Ownership structure like institutional ownership can reduce profit management.…”

Section: Effect Of Institutional Ownership On Earning Managementmentioning

confidence: 86%

The Role of Corporate Diversification, Capital Structure Determinant, And Structure of Ownership on Earning Management with Information Asymmetry as Moderating Variable

2019

RJFA

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Along with the development of the economy and technology, companies are expanding their businesses to be able to defend in the competition in the industry by diversification. In the diversified companies with high complexity, manager's motivation to use various earnings management techniques is increase. Apart from diversification, there are various factors that influence earnings management, including capital structure and ownership, and also information asymmetry. The major objective of this study was to discusses a comprehensive understanding of earnings management and the factors that influence it, namely business diversification, capital structure, ownership structure, and information asymmetry; and second is to empirically investigate the effect of diversification, capital structure, ownership structure and asymmetry of information to earnings management, and to clarify whether information asymmetry can moderate the influence of the three other factors on earnings management as measured by the approach of Stubben (2010). The study used the Total Asset control, Growth Opportunity, ROA, ROE, and Leverage. Data obtained from observations 165 Financial Statements of Manufacturing Companies in the chemical, pharmaceutical, and consumer goods sectors in 2015-2017. These results indicate that diversification does not relation with earnings management, but the other three factors namely capital structure, ownership structure, and information asymmetry are proven to significantly affect earnings management. Information asymmetry variables can moderate the affect of capital structure and ownership structure on earnings management.

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Earnings management and ownership structure in emerging market

Cited by 43 publications

References 73 publications

Real earnings management and corporate governance: a study of Latin America

Real earnings management and corporate governance: a study of Latin America

Impact of Ownership Characteristics on Modified Audit Opinion in Jordan

The Role of Corporate Diversification, Capital Structure Determinant, And Structure of Ownership on Earning Management with Information Asymmetry as Moderating Variable

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