Firm life cycle and earnings management: The moderating role of state ownership

Khương, Nguyễn Vĩnh; Anh, Le Huu Tuan; Vân, Nguyễn Thị Hồng

doi:10.1080/23322039.2022.2085260

Cited by 18 publications

(16 citation statements)

References 75 publications

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“…us, we 2 Complexity define operational innovation as overall efficiency in business operations and divide the operational innovation into technical innovation and scale innovation. Khoung et al [22] examined the relationship between firm life cycle (FLC) and earnings management (EM) in the Vietnamese context with the moderating role of state ownership (SOE). We used the sample of 622 Vietnamese listed companies over the period 2010-2019.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Harymawan et al [18] (i) Investment efficiency (ii) Environmental (iii) Social (iv) Governance Nazir et al [19] (i) Governance (ii) Global technology Akbar et al [20] (i) Financial distress (ii) Corporate restructuring Ryu and won [21] (i) Innovation (ii) Value frim Khoung et al [22] (i) Life cycle (ii) Earning management Yulianto [23] (i) Frim size proxy (ii) Total sales Ahmad et al [24] (i) Life cycle (ii) Investment efficiency Akbar et al [25] (i) Capital management (ii) Profitability (iii) Market performance Yulianto et al [26] (i) Life cycle (ii) Technology information digitalization (TID) Shahzad et al [27] (i) Risk (ii) Emergence (iii) Growth (iv) Decline Ahsan et al [8] (i) Risk (ii) Maturity (iii) Stagnation Complexity nonsystematic risk is higher in the introduction and decline stages and lower in the growth and maturity stages. Also, cash flow fluctuations and information uncertainty differ only in the maturity stage from the stagnation stage, and in this regard, there is no difference between other stages of the life cycle and the stagnation stage.…”

Section: Author Variablesmentioning

confidence: 99%

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The Effect of Specific Risk in Various Stages of the Life Cycle of Companies Listed on the Tehran Stock Exchange

et al. 2022

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This research aims to examine the specific risk of companies and their effectiveness in various stages of the company life cycle on state and nonstate ownership. For this purpose, the specific risk was estimated using Fama and French three-factor models, and the research objective was examined by considering the data panel model during the period 2015 to 2020 in a statistical sample consisting of 136 companies active in the Tehran Stock Exchange. For this purpose, the main contribution of research is evaluation of the effect of specific risk in different stages of the life cycle of companies admitted to the Tehran Stock Exchange. Therefore, the main valuable advantage to helping stock managers is assessing the impact of government ownership and nongovernment ownership on the specific risk of companies at different stages of the life cycle. Also, presenting a model to show the effects of dependent and independent variables in order to evaluate the impact of government and nongovernment ownership. The research results confirmed that the specific risk of the company in the stages of introduction, growth, and decline is higher compared to the stages of maturity and stagnation of the life cycle of companies listed on the Tehran Stock Exchange. Because the coefficients of virtual variables related to the life cycle stages of the company are estimated to be significant. Also, the finding confirmed that government ownership significantly affects the relationship between firm risk and life cycle stages in companies listed on the Tehran Stock Exchange. Because, the coefficient of variable state ownership is negative and significant, indicating a lower specific risk in state-owned companies than in nonstate-owned companies.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Author Variablesmentioning

confidence: 99%

The Effect of Specific Risk in Various Stages of the Life Cycle of Companies Listed on the Tehran Stock Exchange

et al. 2022

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“…The relationship between company life cycle and earnings management with the moderating role of state ownership was studied by Khuong et al (2022). According to statistics, there are differences in accrual earnings management behavior throughout life cycle phases.…”

Section: Literature Reviewmentioning

confidence: 99%

Earnings management model for Visegrad Group as an immanent part of creative accounting

Kováčová

Hrosova

Ďurana

et al. 2022

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Research background: Creative accounting practices do not frequently violate the law and are not considered illegal; however, accounting managers may exploit legal ambiguities to portray the company's financial standing in accordance with management preferences. Therefore, the analysis is focused on the detection of earnings management in companies operating in the Visegrad Group, which represents one of the most commonly used techniques for revealing creative accounting. Purpose of the article: The aim of the presented study is to reveal the presence of creative accounting through the detection of earnings management in the countries of the Visegrad Group and, based on the detected results, to propose a regression model of earnings management in the Visegrad Group. Methods: To reveal the use of creative accounting in the Visegrad Group, ten selected models of earnings management were applied during the period 2016?2020 to a set of 8,134 companies. The Mann-Whitney test and multiple linear regression were used to verify the existence of earnings management. These findings served as the basis for the creation of the linear regression model of earnings management in the Visegrad Group. Findings & value-added: The presence of earnings management was best captured by the Hribar and Collins model in companies operating in the Visegrad Group in the period 2016?2020. The findings also confirmed that positive discretionary accruals acquired higher values over the entire period when compared to negative discretionary accruals, confirming that companies in the surveyed group manage their profits primarily by increasing them. Therefore, we created a regression model, that can serve as a unique basis and is capable of revealing the use of earnings management in the Visegrad Group, as until now nothing like this has been implemented in these countries. In conclusion, this study offers insights for academicians and researchers on creative accounting in the selected period. Lastly, the study contributes to the existing theory by conducting new research on the earnings management determinants of the countries studied.

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“…Due to the mixed results on the relationship between AC and EM, a moderating variable was applied in previous studies (Mansour et al , 2022b) to examine the hidden impact between ACMD and EM based on Baron and Kenny (1986). For example, Khuong et al (2022) used state ownership to moderate the relationship between the firm life cycle and EM. Nonetheless, no earlier study has examined the moderating effect of foreign ownership (FOWN) on ACMD as it relates to accrual EM, which the current study considers.…”

Section: Introductionmentioning

confidence: 99%

Is audit committee busyness associated with earnings management? The moderating role of foreign ownership

Saleh,

Mansour

2024

ARJ

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Purpose An audit committee (AC) whose members hold multiple directorships can adversely affect a firm’s earnings management (EM) behavior due to a lack of time that can prevent members from performing their responsibilities effectively. This paper aims to investigate the moderation role of foreign ownership (FOWN) on audit committee multiple directorships (ACMD) as it relates to accrual EM. Design/methodology/approach Using a sample of 528 observations for Palestinian listed companies over 2009–2019, this research used panel data regression to explore the specified relationships. Additionally, the study conducted a regression analysis using alternative measurements of the ACMD and the extended modified Jones model (2006) to assess robustness. Furthermore, generalized method of moments and a two-stage least squares method were used to address potential endogeneity concerns. Findings The results show that multiple directorships lead to a scarcity of time that can adversely affect efficient management oversight and documented an adverse association between FOWN and discretionary accruals. The results are consistent with agency theory that FOWN brings in expertise and experience from countries with strong governance to benefit local firms and thus recover control, lower agency costs, raise a firm’s value and thus alleviate EM. Originality/value This study provides unique explanations and recommendations for restraining excessive ACMD because this practice decreases managers’ ability to decrease EM. The mixed outcomes in earlier literature on the AC characteristics and EM also indicate a contingent role that may clarify this inconsistency.

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Firm life cycle and earnings management: The moderating role of state ownership

Cited by 18 publications

References 75 publications

The Effect of Specific Risk in Various Stages of the Life Cycle of Companies Listed on the Tehran Stock Exchange

The Effect of Specific Risk in Various Stages of the Life Cycle of Companies Listed on the Tehran Stock Exchange

Earnings management model for Visegrad Group as an immanent part of creative accounting

Is audit committee busyness associated with earnings management? The moderating role of foreign ownership

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