Earnings Management in Malaysian IPOs: The East Asian Crisis, Ownership Control and Post-IPO Performance

Ahmad‐Zaluki, Nurwati A.; Campbell, Kevin; Goodacre, Alan

doi:10.2139/ssrn.963085

Cited by 48 publications

(90 citation statements)

References 52 publications

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“…The coefficient of this variable is negative (-0.309) and significant at the 0.05 level. Thus, French IPO companies in which managers engage in aggressive earnings management experience poor long-run stock return performance, consistent with prior IPO research in other countries (DuCharme et al, 2001;Roosenboom et al, 2003;Pastor-Llorca and Poveda-Fuentes, 2006;Teoh et al, 1998aTeoh et al, , 1998bAhmad-Zaluki et al, 2011).…”

Section: Multivariate Analysissupporting

confidence: 84%

“…relationship between earnings management and post-IPO performance (Abdul Rahman and Wan Abdullah, 2005;DuCharme et al, 2001DuCharme et al, , 2004Roosenboom et al, 2003;Teoh et al, 1998aTeoh et al, , 1998bChang et al, 2010;Ahmad-Zaluki et al, 2011). However, for France no study has tested this relationship until now.…”

Section: Earnings Management and Post-ipo Long Run Stock Market Perfomentioning

confidence: 99%

“…Consistent with previous studies (DuCharme et al, 2001(DuCharme et al, , 2004Roosenboom et al, 2003;Ahmad-Zaluki et al, 2011), DCA discretionary current accruals 4 are used to evaluate earnings management of IPO companies and we adopt « Modified Jones » model 5 for detecting earnings management (Teoh et al, 1998a;Roosenboom et al, 2003;Ahmad-Zaluki et al, 2011).…”

Section: Measure Of Earnings Managementmentioning

confidence: 99%

“…Prior studies report that IPOs manage their earnings aggressively and opportunistically through income-increasing accruals to increase offering proceeds in the IPO year. But they may face poor post-IPO stock returns (PastorLlorca and Poveda-Fuentes, 2006;DuCharme et al, 2001DuCharme et al, , 2004Roosenboom et al, 2003;Teoh et al, 1998a;Ahmad-Zaluki et al, 2011) and they are more likely to delist for performance failure (Li et al, 2006). Of more, IPO companies that manage their earnings aggressively also put too high a price on the new issues, thereby leading to a decrease in the degree of underpricing (Kim and Park, 2005;Kimbro, 2005).…”

Section: Introductionmentioning

confidence: 99%

“…Most prior studies of earnings management in the context of IPOs (DuCharme et al, 2001;Roosenboom et al, 2003 ;Teoh et al, 1998a;Ahmad-Zaluki et al, 2011) suggest that companies opportunistically boost their earnings upward through income-increasing accruals in the IPO process and the quarters immediately after the IPO. There are several reasons.…”

Section: Introductionmentioning

confidence: 99%

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Earnings management and performance of French IPO companies

Djerbi¹,

Jarboui²

2013

J. Account. Taxation

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In this paper, we examine the impact of discretionary current accruals on the performance of French IPO companies. We first note income-increasing earnings management in the first year as a public company and not in the year before the IPO (Initial Public Offerings). Based on a sample of 139 French IPOs over the period 1999 to 2007, including 38 failures, we also document that companies associated with aggressive earnings management in the IPO process, tend to suffer from subsequently poor returns and to delist for performance failure after IPO. However, we find no evidence to suggest that the level of initial return is negatively related to discretionary current accruals.

show abstract

Section: Multivariate Analysissupporting

confidence: 84%

Section: Earnings Management and Post-ipo Long Run Stock Market Perfomentioning

confidence: 99%

Section: Measure Of Earnings Managementmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Earnings management and performance of French IPO companies

Djerbi¹,

Jarboui²

2013

J. Account. Taxation

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The role of directors with multiple board seats and earnings quality: A Singapore context

Chee

Tham

2020

J Corp Accounting Finance

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This article explores whether multiple directorships has an influence on earnings management for Singaporean publicly listed firms. This article attempts to determine whether boards with multiple directorships are effective monitors and able deterrents of earnings management activities. Drawing on resource dependence theory, the results suggest that directors with multiple board seats will be able to tap on external resources for information, skills, and financial resources using their board connectedness. Data analysis is based on publicly listed firms on Singapore Stock Exchange (SSE) with a final pooled sample of 1,404 firm‐year observations from 2015 to 2018. Findings of this study show that with a higher level of multiple directorships, there is a significant negative relationship with the level of earnings management, where earnings management is measured by Dechow et al. (The Accounting Review, 1995, 70, 193–225) Modified Jones model and the Kothari et al. (Journal of Accounting and Economics, 2005, 39, 163–197) performance‐adjusted model. We also find that firms in Singapore that have a higher number of multiple directorships on its board, will have a lower level of tolerance on income‐increasing earnings manipulation. Notable secondary findings of this study include a significant negative relationship between the proportion of female directors on the board with the level of earnings management (income‐increasing manipulations). Additionally, it is found that the engagement of Big Four auditors has no significant relationship with the level of earnings management in the context of Singaporean firms. This study has significant implications and contributions to the theoretical applications and policy reforms, specifically pertaining to the Singapore Code of Corporate Governance on the issue of multiple directorships.

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The relationship between religiosity and voluntary disclosure quality: a cross-country evidence from the banking sector

Salem

Ezeani

Song

2022

Rev Quant Finan Acc

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This study examines whether there is a relationship between religiosity and voluntary disclosure quality (VD_Q). We utilise a three-dimensional approach to capture the VD_Q on an international sample of 1,484 bank-year observations in 12 countries of the Middle East and North Africa (MENA) region over 14 years period from 2006 to 2019. Our findings indicate that religiosity is positively associated with banks' VD_Q. Our findings also show that the association between religiosity and VD_Q is more noticeable in banks operating in countries with a low level of legal protection, low level of control of corruption and during the crisis period. We further illustrate that the influence of religiosity is more intense on the spread and usefulness of information dimensions than the quantity dimension. These empirical findings are robust to alternative proxies of religiosity and sample specification. This result supports the notion that religiosity enhances corporate disclosure quality and reduces the asymmetric information gap between managers and outside users of information.

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Earnings Management in Malaysian IPOs: The East Asian Crisis, Ownership Control and Post-IPO Performance

Cited by 48 publications

References 52 publications

Earnings management and performance of French IPO companies

Earnings management and performance of French IPO companies

The role of directors with multiple board seats and earnings quality: A Singapore context

The relationship between religiosity and voluntary disclosure quality: a cross-country evidence from the banking sector

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