Jones, Dechow And Kasznik Models Significance In The Romanian Economic Environment

Matiş, Dumitru; Vladu, Alina Beattrice; Negrea, Laura

doi:10.29302/oeconomica.2010.12.1.25

Cited by 10 publications

(8 citation statements)

References 51 publications

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“…Meanwhile absolute growths of operating expenses (∆COST) confirmed their expected positive correlations with total accruals (TACC). Consistently with the previous studies (Matis et al, 2010), there were observed positive relationships between the difference amid changes in sales revenues and changes in net account receivables (∆REV-∆REC) and total accruals (TACC).…”

Section: The Assessment Of Accrual Models Using the Time Series Data Approachsupporting

confidence: 90%

“…Bešlic et al (2015), analysing the predictive power of the modified Jones model in the Serbian economic environment, show that this model is not sufficient and there is a need for its further modification. Comparable conclusions were reached by Matis et al (2010) who compared the existing accrual-based models to detect manipulation of financial reporting on a sample of companies listed on the Bucharest Stock Exchange, and Islam et al (2011) who examined the modified Jones model to detect earnings management in the context of the Bangladesh capital market.…”

Section: The Analysis Of Relationships Between Discretionary Accruals and The Frequency Of Big Bath And Small Net Income Increasescross-smentioning

confidence: 99%

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Estimating accrual-based models in Poland: the time series data approach and the cross-sectional data approach

Comporek¹

2021

Argumenta Oeconomica

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The analysis of accruals can be considered as an important tool for examining the level and the patterns of earnings management phenomenon in an enterprise. This paper compares the empirical features of different accrual-based models within industrial public companies listed on the Warsaw Stock Exchange in the period 2002-2017. The conducted research is focused not only on examining the empirical validity of the original Jones model, the modified Jones model and the ROA-matched Jones model. It also submits the alternative regression model used for the detection of earnings management practices, taking into account the following independent variables: operational expenses as a proxy for the current components of nondiscretionary accruals, as well as intangible assets as a proxy for the noncurrent components of non-discretionary accruals. Then, the authorexamined the probability of occurrence of small increases in net income or big bath charges in companies reporting specific values of discretionary accruals. The conclusions drawn in this paper are part of practical research concerning the use of informational and decision-making features of accruals analysis in the Polish post-transitional capital market, acting simultaneously as a prerequisite for further research in this field.

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Section: The Assessment Of Accrual Models Using the Time Series Data Approachsupporting

confidence: 90%

Section: The Analysis Of Relationships Between Discretionary Accruals and The Frequency Of Big Bath And Small Net Income Increasescross-smentioning

confidence: 99%

Estimating accrual-based models in Poland: the time series data approach and the cross-sectional data approach

Comporek¹

2021

Argumenta Oeconomica

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“…The other study, Matis et al (2010), makes an attempt of measuring the earnings management using an econometric model valid for the Romanian specificities by trying to establish the level of significance of three acknowledged econometric models: Jones (1991), Dechow et al (1995) and Kasznik (1999) on Romanian economic environment. Their analyses lead to the conclusion that Jones model (1991) was found to be significant for Romanian economic environment.…”

Section: Literature Reviewmentioning

confidence: 99%

Detecting Earnings Management Investigation on Different Models Measuring Earnings Management for Emerging Eastern European Countries

Callao

Jarne

Wróblewski

2017

Int. J. Res. Granthaalayah

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Earnings management has received considerable attention as numerous papers were investigated different hypotheses. However, there is still no consensus on how efficiently detect and measure earnings managements. Nevertheless, most authors use methodology based on accruals, sophisticated models that attempt to separate total accruals into discretionary and nondiscretionary components. We may find wide range of use of alternative models to measure earnings management. Nevertheless, the researchers typically used five the most popular models: the Jones (1991) model, the modified Jones model (Dechow, Sloan, and Sweeney, 1995), Teoh, Welch and Wong (1998) model, Kasznik (1999) model and Kothari et al. (2005) model. However, it is confirmed that the environment where the company is operating influences on the earnings management. Therefore, we focus our study on the growing market of the developing European countries. In particular, our analysis comprises four different and independent samples from emerging Eastern European countries: Poland, Hungary, Slovakia and the Czech Republic, since earnings management in Eastern European countries is still barely explored. Consequently, our objective is to evaluate the ability of the existing models on earnings management for the environment of countries from the East of Europe. Our results confirm that the Jones (1991), Shivakumar (1996), Kasznik (1999) and Yoon and Miller model (2002) offers the most reliable results for detecting earnings management in emerging Eastern European post-communism economic environment. Additionally, based on broad analyses the results indicate that there is no superiority of the cross-sectional models vis-à-vis their time-series counterparts. Both methodologies are consistent in detecting earnings management for Eastern European companies. Therefore, we verified the importance of the previous evaluation of the ability of each model for detecting earnings management before its application. It is because each economic environment has different peculiarities and circumstances, as observed in case of our developing European countries.

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“…These emphasize the correlation between intangible assets and company performance expressed by annual average market price, price/earnings ratio and earnings per share (Purcărea and Stancu, 2011). Other models analyze companies' performance on the base of correlation between net profit and cash-flow (Matis et al, 2010).…”

Section: Literature Reviewmentioning

confidence: 99%

Factors Influencing The Companies‘ Profitability

Burja¹

2011

JASO

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The information about company performance, especially about its profitability, is useful in substantiating managerial decisions regarding potential changes in the economic resources that the company will be able to control in the future. This objective aims achieving superior economic results that will increase the company's competitiveness and will satisfy the shareholders' interests. The paper presents some company performance analysis models, which highlight the influencing factors. The models are based on regression analysis, and the obtained results emphasize the strong connection between the profitability of the analyzed company expresses through Return on assets and the management of available resources.

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Jones, Dechow And Kasznik Models Significance In The Romanian Economic Environment

Cited by 10 publications

References 51 publications

Estimating accrual-based models in Poland: the time series data approach and the cross-sectional data approach

Estimating accrual-based models in Poland: the time series data approach and the cross-sectional data approach

Detecting Earnings Management Investigation on Different Models Measuring Earnings Management for Emerging Eastern European Countries

Factors Influencing The Companies‘ Profitability

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