scholarly journals The impact of board characteristics on earnings management

2021 ◽  
Vol 10 (3) ◽  
pp. 8-17
Author(s):  
Mahmoud Mohmad Aleqab ◽  
Maha Mohammad Ighnaim
Keyword(s):  
Regression Analysis ◽  
Earnings Management ◽  
Board Of Directors ◽  
Stock Exchange ◽  
The Other ◽  
Real Earnings Management ◽  
Board Members ◽  
Amman Stock Exchange ◽  
The Board Of Directors ◽  
The Impact

This study explores the effect of the board of directors’ characteristics on real earnings management in Jordanian non-financial companies listed on the Amman Stock Exchange. The sample size is 131 companies during the period of 2015–2017. The study uses a board of directors’ size, board members’ independence, board members’ financial experience, number of board meetings, membership in more than one board, and the ownership of board members of company shares to represent the board of directors’ characteristics. Real earnings management is measured using the Roychowdhury model (2006). A multiple regression analysis (panel data) is used to investigate the effect of the board of directors’ characteristics on real earnings management. The study found a negative and statistically significant impact for both: board members’ independence and board members’ financial experience on earnings management through real activities against the previous studies’ findings, this research measured the impact of real activities. On the other hand, the study did not find any statistically significant effect of the additional earnings management variables through actual activities

scholarly journals The Effect of Board Diversity on Real Earnings Management: Empirical Evidence From Jordan

2019 ◽  
Vol 10 (5) ◽  
pp. 495
Author(s):  
Ahmad Almashaqbeh ◽  
Hasnah Shaari ◽  
Hijattulah Abdul-Jabbar
Keyword(s):  
Earnings Management ◽  
Stock Exchange ◽  
Real Earnings Management ◽  
Standard Errors ◽  
Board Members ◽  
Quantitative Methodology ◽  
Board Diversity ◽  
Age Diversity ◽  
Amman Stock Exchange ◽  
The Board Of Directors

This study considers the effect of foreign board members and age diversity on real earnings management (REM), by controlling the firm size, leverage and growth. This study employed quantitative methodology and longitudinal data for non-financial business firms, quoted on the Amman Stock Exchange from 2011 to 2015. Data were analysed using descriptive statistics and Panel Corrected Standard Errors (PCSE) regression. This study found that foreign boards member, age diversity, leverage and growth had negative and significant associations with REM. Based on the results, a firm should appoint young members to the board in addition to older members to pave the way to cross-ideology that can deter REM activities. At least one foreign director should exist within the board of directors because a foreign board member has different qualifications and experiences that may help to deter REM practices.

scholarly journals Impact of Institutional Governance Tools on Reducing Agency Costs to Commercial Banks Listed in the Amman Stock Exchange

2020 ◽  
Vol 11 (5) ◽  
pp. 414
Author(s):  
Omar Fareed Shaqqour
Keyword(s):  
Board Of Directors ◽  
Agency Costs ◽  
Stock Exchange ◽  
Free Cash Flow ◽  
Institutional Governance ◽  
Study Results ◽  
Amman Stock Exchange ◽  
The Board Of Directors ◽  
Governance Tools ◽  
The Impact

This study aims to identify the Impact of institutional governance tools on reducing agency costs in the banks listed in Amman Stock Exchange (ASE). To this end, the researcher has studied the impact of an institutional governance tools on reducing the agency costs. Which are: board of directors` size, board of directors` independent members ratio, number of audit committee meetings, ratio of debt-financing, market share and bank`s size.The agency costs are measured by three indicators: assets turnover ratio, operating expenses ratio and free cash flow indicator. Study sample comprises all 16 banks listed in the ASE, for which data are available in the ASE during period of the study (2017 – 2019). EXCEL and SPSS are used to identify descriptive characteristics of study and analyze data. Regression analysis method is also used to test the study hypotheses. The study results have concluded that agency costs increase with the increase in the board of directors size, the independent members ratio, number of meetings of audit committees, debt finance ratio and market share ratio. The study has also concluded, as per the operating expenses indicator, that agency costs increase with the increase of debt financing, while they decrease with the increase in the board of directors size. According to the free cash flow indicator, the study results have showed that the agency costs increase with increase in the board of directors size.

The impact of ownership structure and the board of directors’ composition on tax avoidance strategies: empirical evidence from Jordan

2020 ◽  
Vol 18 (4) ◽  
pp. 795-812
Author(s):  
Amneh Alkurdi ◽  
Ghassan H. Mardini
Keyword(s):  
Board Of Directors ◽  
Ownership Structure ◽  
Stock Exchange ◽  
Tax Avoidance ◽  
Policy Implications ◽  
Content Type ◽  
Amman Stock Exchange ◽  
Avoidance Strategies ◽  
The Board Of Directors ◽  
The Impact

Purpose Adopting agency theory, the purpose of this study is to explore the impact of ownership structure and board of directors’ composition on the extent of tax avoidance strategies. Design/methodology/approach The sample included all of the Jordanian first market companies listed on the Amman Stock Exchange from 2012 to 2017, comprising 348 observations. Findings The main finding of the paper is that tax avoidance is negatively related to managerial and institution ownership structures, which reduces the usage of tax avoidance strategies. Foreign ownership, however, has a positive relation that increases the likelihood of adopting tax avoidance strategies. Practical implications This study has policy implications for policymakers in relation to designing future tax systems to reduce the possibility of engaging in tax avoidance practices. Originality/value To the best of the authors’ knowledge, this study is the first of its kind that investigates the effects of the managerial, foreign and institutional ownership classes and board composition on tax avoidance for Jordanian listed companies.

scholarly journals Analisis Hubungan Manajemen Laba dan Struktur Kepemilikan Terhadap Kinerja Perusahaan di BEI Tahun 2016-2019

Owner ◽  
2021 ◽  
Vol 5 (2) ◽  
pp. 653-662
Author(s):  
Sari Dewi ◽  
Lisa Lisa
Keyword(s):  
Firm Performance ◽  
Earnings Management ◽  
Board Of Directors ◽  
Ownership Structure ◽  
Asset Management ◽  
Stock Exchange ◽  
Secondary Data ◽  
Real Earnings Management ◽  
The Board Of Directors ◽  
Q Model

Firm performance includes the activities produced by company management and high firm performance can be said to allow them to plan their work according to their own goals and take risks with full responsibility. This study was conducted to determine the effect of earnings management, the size of the board of directors, and ownership structure (blockholders ownership, institutional ownership, family ownership, and managerial ownership) on the firm's performance. By using sample data listed on the Indonesia Stock Exchange (IDX) from 2016 to 2019. Because there are several previous studies that produce different values ?? on firm performance. Therefore, it is necessary to re-examine this. In this study using the firm's performance with Tobin's Q model to determine the value of asset management generated by the company. The data used is panel data with secondary data collection techniques to test outliers by SPSS software version 25, then test descriptive statistics, multicollinearity, heteroscedasticity, R Square, F test, and also t-test using Eviews software version 10. The results of this study conclude that both accrual-based and real earnings management have a significant positive effect on firm performance, while the size of the board of directors has a significant negative effect on performance. The ownership structure has no significant effect on the firm's performance. The result of insignificant results could be caused by not supporting the agency theory perspective, as well as the lack of company control.

scholarly journals Does the competency attributes of board members’ enhance the monitoring of earning management? Evidence from a developing country

2017 ◽  
Vol 13 (1) ◽  
pp. 100-108 ◽  
Author(s):  
Anas Najeeb Mosa Ghazalat ◽  
Md.Aminul Islam ◽  
Idris Bin Mohd Noor ◽  
Ayman Ahmad Abu Haija
Keyword(s):  
Earnings Management ◽  
Board Of Directors ◽  
Management Practices ◽  
Stock Exchange ◽  
Industrial Firms ◽  
Time Period ◽  
Opportunistic Behaviour ◽  
The Board Of Directors ◽  
High Level ◽  
The Impact

The monitoring role of the board of directors has been extensively slammed as being ineffective since it depends on several factors. This study sheds light on some of the directors’ attributes and the impact on mitigating the opportunistic behaviour. By adopting different perspectives, we argued whether the directors with more expertise, tenure, outside directorships become more effective in mitigating the opportunistic behaviour. These attributes could have a curvilinear effect since such optimal attributes could improve the competency level of the directors. Hence, the board becomes more effective. Meanwhile, its effect could turn inversely to make the directors ineffective. This study adopted discretionary accruals as an indicator for earnings management. A sample of 114 service and industrial firms listed in Amman Stock Exchange (ASE) from 2009-2015 were chosen for this study. Pooled OLS regression model is enlisted to avoid the inconsistently of the slope across individual units and time period. Results show that the directors with financial expertise are more effective to minimise the level of earnings management practices. Conversely, the independent directors with high tenure besides the higher directors with outside directorships are engaged with a high level of earnings management practices. This implies the existence of each of the friendliness hypothesis and the busyness hypothesis in the Jordanian market. Similarly, this also explains the weakness of the board of directors in complying to their monitoring role in the emerging markets in general.

scholarly journals Directors’ and officers’ insurance in Canada

2007 ◽  
Vol 4 (4) ◽  
pp. 154-159 ◽  
Author(s):  
M. Martin Boyer
Keyword(s):  
Board Of Directors ◽  
Financial Services ◽  
Financial Distress ◽  
Stock Exchange ◽  
The United States ◽  
The Other ◽  
Board Members ◽  
Managerial Entrenchment ◽  
The Board Of Directors ◽  
Directors And Officers

This paper looks at the insurance demand of a firm’s directors and officers using a sample of Canadian corporations (excluding firms from the financial services and mining sectors) from 1993-1999. More to the point, we study the demand for directors’ and officers’ insurance. Contrary to the financial distress theory of hedging, our results suggest that larger corporations are more likely to purchase D&O insurance. On the other hand, insurance is more likely when the firm is financially weak. Firms are also more likely to purchase D&O insurance when there are few outsiders on the board of directors and when the board members have an important financial stake in the corporation, suggesting that D&O insurance is yet another tool for managerial entrenchment. Surprisingly, being listed on a stock exchange in the United States does not seem to have an impact on the demand for D&O insurance, contrary to previous results

scholarly journals How does real earnings management affect firms’ future profitability? Evidence from Jordan

2020 ◽  
Vol 18 (1) ◽  
pp. 47-55
Author(s):  
Malek Alsharairi ◽  
Rasha Khamis ◽  
Mahmoud Alkhalaileh
Keyword(s):  
Developing Countries ◽  
Regression Analysis ◽  
Earnings Management ◽  
Stock Exchange ◽  
Real Earnings Management ◽  
Future Research ◽  
Ongoing Debate ◽  
Industrial Companies ◽  
Amman Stock Exchange ◽  
Channel Stuffing

This paper investigates the effects of the lagged real earnings management on the firms’ future profitability using a panel dataset (for the years 2012–2017) from the Jordanian industrial companies listed in the Amman Stock Exchange (ASE). We follow Roychowdhury (2006) to measure real earnings management using two proxies: abnormal sales (REMS) and abnormal production (REMP) in the regression analysis. Our findings reveal that real earnings management through abnormal sales has an insignificant effect on the firms’ future profitability. However, we document evidence that firms’ future profitability is adversely and significantly affected by real earnings management through abnormal production. We contribute to the ongoing debate in the literature of real earnings management and its ramifications on firms’ profitability, specifically in the context of developing countries. This research provides implications for policymakers, investors and managers regarding the potential consequences of channel stuffing practices at the different stages of the supply chain on the firm’s future profitability. Future research is suggested to focus on how real earnings management can possibly disrupt supply chains.

The impact of board characteristics on corporate investment decisions: an empirical study

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ben Kwame Agyei-Mensah
Keyword(s):  
Regression Analysis ◽  
Board Of Directors ◽  
Investment Decisions ◽  
Corporate Investment ◽  
Independent Directors ◽  
Investment Efficiency ◽  
Content Type ◽  
Board Characteristics ◽  
The Board Of Directors ◽  
The Impact

Purpose The purpose of this study is to investigate the influence of board characteristics on firms’ investment decisions. Design Methodology Approach The study used data sourced from annual reports of firms listed on the Ghana Stock Exchange from 2014 to 2018. Descriptive analysis was performed to provide the background statistics of the variables examined. This was followed by a regression analysis which forms the main data analysis. Findings The multiple regression analysis results indicated that the proportion of independent directors and financial experts on the board are negatively related to firm investment. These findings imply that independent directors and financial experts on the board can help firms reduce overinvestment and improve investment efficiency. Originality Value The extant literature shows that the board of directors are an effective mechanism to reduce agency problems in firm decisions and operating performance. However, there has been little research on the role of the board of directors in corporate investment policy.

scholarly journals Impacts of financial distress on real and accrual earnings management

2018 ◽  
Vol 22 (2) ◽  
pp. 222
Author(s):  
Danella Rachel Muljono ◽  
Kim Sung Suk
Keyword(s):  
Earnings Management ◽  
Financial Distress ◽  
Listed Companies ◽  
Production Costs ◽  
The Other ◽  
Real Earnings Management ◽  
Financial Health ◽  
Other Hand ◽  
Management Approaches ◽  
The Impact

This research investigates the impact of financial distress on the magnitude of different earnings management approaches, namely real earnings management and accruals earnings management. This research utilizes a total of 2002 firm-year observations from 259 publicly-listed companies and 20 sub-industries in Indonesia from the year 2005 to 2014. Financial distress causes a significant increase of real earnings management and a significant decrease of accruals earnings management. It means that the healthier the company, the bigger the magnitude of real earnings management that is conducted through managing production costs and discretionary expenses. On the other hand, the lower the financial health of the company, the bigger the magnitude of accruals earnings management that is conducted through managing discretionary component of accruals.

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