Management Fraud Propensity Factors, Governance Interactions and Earnings Manipulation: a Case of Malaysian Public Listed Companies

Kamal*, Mohamad Ezrien Mohamad; Salleh, Mohd Fairuz Md; Ahmad, A.L.

doi:10.35940/ijrte.c6455.098319

Cited by 5 publications

(4 citation statements)

References 27 publications

(46 reference statements)

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“…Penelitian mengenai earnings manipulation sudah banyak diteliti diantaranya penelitian yang dilakukan oleh Aflatooni et al (2021); Aljinovic Barac et al (2020); Baskaran et al (2020);Beneish (2019;Beneish et al (2018); Kamal et al (2019); Kurniawati & Febiolla (2022); Ningsih & Reskino (2023); Nyakarimi (2022). Dari banyaknya penelitian tersebut kebanyakan berfokus pada faktorfaktor keuangan dan pengawasan, tetapi belum mempertimbangkan faktor budaya dalam memanipulasi laba.…”

Section: Pendahuluanunclassified

Peran Auditor Terhadap Praktik Earnings Manipulation Di Kalangan Perusahaan Lq45

Reskino,

Kurniasih

2023

JMB

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Using the analysis of fraud theory developed by Reskino (2022), this study examines the relationship between employee diff, the big 4 auditors, auditor switching, the ethnic composition of directors on the board, and the ethnic composition of the audit committee on earnings manipulation. 55 samples of company data that were consistently included in the IDX LQ45 list from the Indonesia Stock Exchange (IDX) were used with the purposive sampling method. Using the Modified Jones Model with ROA which is believed to produce a higher adjusted R2 than the Modified Jones Model. The results of the research show that earnings manipulation that earnings manipulation still occurs within the company in the presence or absence of employee diff, auditor switching, Indonesian national board of directors and audit committee. However, the role of the big 4 auditors can reduce earnings manipulation. This research implies that it is hoped that regulators can issue regulations regarding disclosing more non-financial measures in financial statements so that users of financial reports can directly compare financial and non-financial measures. By knowing non-financial indicators in LQ45 companies, it is hoped that they conciseness make appropriate policies to mitigate risk in LQ45 companies.

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Section: Pendahuluanunclassified

Peran Auditor Terhadap Praktik Earnings Manipulation Di Kalangan Perusahaan Lq45

Reskino,

Kurniasih

2023

JMB

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“…Beberapa peneliti berupaya menyelidiki penyebab terjadinya tindak financial fraud. Financial fraud yaitu aktivitas memanipulasi laba sebagai pelanggaran atas aturan-aturan akuntansi (Kamal, 2019). Secara umum, penyebab fraud dapat dibagi menjadi dua faktor, yaitu yang disebabkan dari intern perusahaan serta dari ekstern perusahaan (dilihat dari segi auditornya).…”

Section: Motivasi Financial Fraudunclassified

Financial Fraud Scandal: Motivasi, Konsekuensi dan Upaya Memerangi Fraud

Suryandari

Gayatri

2022

JSEB

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The article aims to determine the motivation, consequences and efforts to reduce fraud. The socio-economic impact of the scandal determines whether regulation becomes fundamentally tighter. This study uses a systematic literature review approach with a population of 235 articles published in reputable international journals. Based on the predetermined criteria, sixteen articles were obtained as research samples. As many as 62.5 percent of the articles discussed reviewed the Enron case because it was considered a case that shocked the world, involving companies and public accounting firms that were considered independent parties. The urge to commit fraud can be seen from the internal and external aspects of the company. The consequences of fraud that occur can drag the company and auditors as independent parties. The need for efforts to minimize the occurrence of fraud includes improvements to the company, improvements to the criminal and legislative processes and improvements to individual morality.

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“…Earnings Management practice can lead to misleading financial statements, despite manipulatively fulfilling market expectations of company"s performance to increase its share price (Agrawal & Chatterjee, 2015;Kamal, Salleh & Ahmad, 2019). It has been identified as the main culprit leading to catastrophic fraudulent financial reporting scandals worldwide, with huge losses suffered by shareholders amounting to billions of dollars (Dharan & Bufkins, 2008).…”

Section: Introductionmentioning

confidence: 99%

Concealing Financial Distress With Earnings Management: A Perspective on Malaysian Public Listed Companies

Kamal

Khazalle²

2021

IJFR

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Earnings Management is prevalent among corporations, resulting to misleading information disclosed on financial statements. By adopting agency theory argument, in line with fulfilling shareholders expectations on financial performance while securing their position and interest within the company, management may be influenced to engage earnings management when the actual financial outcome is in financial distress. Hence, this study attempts to identify whether companies listed on Industrial Product sector of Malaysian Bourse experienced financial distress condition and embark on earnings management. It also examines potential relationship between financial distress conditions and earnings management within the context of companies listed within Industrial Product sector of Malaysian Bourse in 2016 and 2017. Industrial Product sector was chosen as focus of this study due to its critical position in nation’s transformation to become developed country and as the main contributor to the nation’s GDP with largest market capitalization value in local bourse. Financial distress was proxied by Altman Z score and earnings management by discretionary accruals as per Kothari (2005). The study was conducted using the quantitative statistical method by running multiple regressions in SPSS version 23. The study also included three control variables, such as firm size, financial leverage and free cash flow from operation. The sample of this study comprised of 454 firms of Industrial Products Sector, listed on Malaysian Bourse from 2016 to 2017. The result revealed significant negative relationship between financial distress and earnings management by companies within Industrial Product sector. Financial leverage and free cash flow from operation have inverse relationship with earnings management, while firm size has a positive relationship with earnings management. This also means management of Industrial Product Sector companies engage earnings management when their financial condition is not in distress, hence they are not using earnings management to conceal financial distress condition. Instead they may use earnings management to leverage on their non-distress financial condition to attain better share price performance and financing arrangement.

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Management Fraud Propensity Factors, Governance Interactions and Earnings Manipulation: a Case of Malaysian Public Listed Companies

Cited by 5 publications

References 27 publications

Peran Auditor Terhadap Praktik Earnings Manipulation Di Kalangan Perusahaan Lq45

Peran Auditor Terhadap Praktik Earnings Manipulation Di Kalangan Perusahaan Lq45

Financial Fraud Scandal: Motivasi, Konsekuensi dan Upaya Memerangi Fraud

Concealing Financial Distress With Earnings Management: A Perspective on Malaysian Public Listed Companies

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