Real earnings management and the relevance of operating cash flows: A study of french listed firms

Boujelben, Saoussen; Khemakhem-Feki, Hela; Alqatan, Ahmad

doi:10.1057/s41310-020-00091-0

Cited by 12 publications

(6 citation statements)

References 40 publications

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“…The profitability, which is measured by ROA, is documented to be significantly and positively related to the earnings quality of selected firms which is in line with the studies of Kim, et al (2012), Lee et al (2006) and Dechow et al (1995). On the other hand, the cash flows from operations which measures the firm's operating performance is found to be inversely related to earnings quality consistent with the studies of Boujelben et al (2020), Hsu and Koh (2005) and Dechow (1992). Dimitropoulos (2020, p. 6) suggests that the inverse relationship between cash flows from operations and earnings quality can be explained by the manager's incentive to adjust more accruals to respond to the company's poor operating performance.…”

Section: Table 2: Descriptive Statisticssupporting

confidence: 86%

“…This method is also utilized in the studies of Gras-Gil et al (2016) and Khosropour (2017). Some control variables namely; leverage, firm size, audit quality, firm financial performance, and cash flows from operations were also included into the analysis to investigate their association with EM activities in line with some other studies in the literature (Dechow, 1992;Gargouri et al, 1998;Hsu and Koh, 2005;Sun et al, 2010;Choi and Pae 2011;Hong and Andersen 2011;Rahmawati and Dianita, 2011;Choi et al, 2013;Toukabri et al, 2014;Bozzolan et al, 2015;Muttakin et al, 2015;Gras-Gil et al 2016;Grecco et al 2017;Khosropour 2017;Marta Cristina Pelucio et al 2017;Yip et al, 2019;Boujelben, Khemakhem and Ahmad, 2020;Dimitropoulos 2020).…”

Section: Data Set and The Variables Utilizedmentioning

confidence: 93%

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The Relationship between Corporate Social Responsibility and Earnings Management: Empirical Evidence from the U.S.

SELİMEFENDİGİL>

Öner

2022

Cankiri Karatekin Universitesi Iktisadi Ve Idari Bilimler Fakultesi Dergisi

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The purpose of this study is to reveal the nexus between Earnings Management (EM) and Corporate Social Responsibility (CSR) as well as comparing the earnings management estimation models. Using Dechow and Dichev’s (2002) and Kothari, Leone, and Wasley’s (2005) models; in this study abnormal accruals are estimated and utilized as a sign of earnings quality. This study utilized data from 26 non-financial U.S. companies for the period between 2011 and 2020. The findings reveal that the Dechow and Dichev’s (2002) model is more strongly pronounced than Kothari, Leone, and Wasley’s (2005) model in estimating accruals EM. Furthermore, no significant relationship has been documented between EM and CSR. With respect to the control variables, it is found that audit-tenure, leverage, and cash flows from operations have an inverse association with EM whereas return on assets has a positive association. Finally, in this study no relationship is documented between firm size and EM.

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Section: Table 2: Descriptive Statisticssupporting

confidence: 86%

Section: Data Set and The Variables Utilizedmentioning

confidence: 93%

The Relationship between Corporate Social Responsibility and Earnings Management: Empirical Evidence from the U.S.

SELİMEFENDİGİL>

Öner

2022

Cankiri Karatekin Universitesi Iktisadi Ve Idari Bilimler Fakultesi Dergisi

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“…It is noted that “a critical mass of three or more females on top management can enhance the internal corporate governance practices, and act as a controlling lever on other members and top management team members”. From a governance perspective, it is suggested that companies with higher representation of women on the CFOs team influence the creation of corporate ethics codes, as women tend to be more sensitive to reputation issues, improving the company's reputation and increasing public trust (Boujelben et al , 2020; Fang et al , 2022; Arun et al , 2015). In the process of acquiring and maintaining resources, the female CFOs are more likely to propose tougher questions and put stronger arguments forward against any opportunistic goals (Dobija et al , 2022; Baker et al , 2019; Krishnan et al , 2011).…”

Section: Theoretical Framework and Hypothesis Developmentmentioning

confidence: 99%

“…Indeed, these situations can give a different direction of understanding the role of minorities (e.g. female CFOs) in facing governance issues (Boujelben et al , 2020; Liu et al , 2016; Baker et al , 2019; Guizani and Abdalkrim, 2021). To understand better the vital role of female CFOs on governance issues (e.g.…”

Section: Introductionmentioning

confidence: 99%

Are female CFOs more ethical to the occurrences of financial reporting fraud? Theoretical and empirical evidence from cross-listed firms in the US

Maulidi

Shonhadji²,

Fachruzzaman³

et al. 2022

JFC

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Purpose The purpose of this study is to examine whether female chief financial officers (CFOs) are associated with the occurrences of financial reporting fraud. This study offers new theoretical and empirical evidence on whether firms with more female CFOs are more (less) likely to engage in financial reporting fraud. Design/methodology/approach This study is based on a sample of US-listed firms from 2011 to 2021. The authors speculate that female CFOs play a weaker role in the occurrences of financial reporting fraud. So, firms with a proportional number of female CFOs should be less likely to commit financial reporting fraud. Findings The data provide support for the predictions of this study. This study suggests a negative and significant association between the dummy variables for female CFOs and the occurrences of financial reporting fraud. The authors find that this association is contingent on governance mechanisms [e.g. ownership structure, politically connected CEOs and firms' conditions that do (or do not) invest in a gender-diverse board]. Originality/value This study offers different perspectives on the impact of female CFOs on the occurrences of financial reporting fraud. The results of this study are distinguishable from prior studies. This study moves the analytical focus from the macro level (gender diversity or female corporate leaders) to the micro level (female CFOs) to understand firms' propensity to commit financial reporting fraud. Additionally, this study is based on factual financial reporting fraud cases, considering the US firms' fraud characteristics.

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“…Sales manipulation refers to the speeding up of the timing of the sale by offering discounts, price concessions, easier terms of credit, etc. These help to boost sales volume temporarily and current period earnings (Boujelben et al , 2020). Overproduction implies producing more goods than the optimal level to raise earnings.…”

Section: Introductionmentioning

confidence: 99%

The impact of real earnings management on corporate credit risk

Hunjra

Muhammad

Sebai

2022

JFRA

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Purpose Earnings management (EM) plays a vital role in risk management. This paper aims to investigate the impact of real earning management (REM) on credit risk. Design/methodology/approach This paper measures the credit risk by the expected default frequency of Kealhofer, McQuown and Vasicek model. This paper uses data from 2011 to 2020 of Pakistani manufacturing listed firms. This paper applies the fixed effect to analyze the results and generalized methods of moments to handle the heterogeneity issue. Findings This paper finds that the impact of REM on corporate credit risk is positive and significant and that of sales manipulation is negative and significant. This paper also reports similar outcomes of the robustness test using dynamic panel regression. Originality/value The findings of this study may help managers to modify the EM strategy to minimize corporate credit risk. Furthermore, the findings of this study are important for investors to enhance their understanding of firms’ accounting information, REM activities and cash flow patterns. It further suggests the manager should consider credit risk as an important factor while practicing REM.

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Real earnings management and the relevance of operating cash flows: A study of french listed firms

Cited by 12 publications

References 40 publications

The Relationship between Corporate Social Responsibility and Earnings Management: Empirical Evidence from the U.S.

The Relationship between Corporate Social Responsibility and Earnings Management: Empirical Evidence from the U.S.

Are female CFOs more ethical to the occurrences of financial reporting fraud? Theoretical and empirical evidence from cross-listed firms in the US

The impact of real earnings management on corporate credit risk

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