scholarly journals Effect of earnings management on economic value added: G20 and African countries study

2017 ◽  
Vol 20 (1) ◽  
Author(s):  
Zhen-Jia Liu ◽  
Yi-Shu Wang
Keyword(s):  
Earnings Management ◽  
Economic Value ◽  
Negative Relationship ◽  
National Development ◽  
Value Added ◽  
Ordinary Least Squares ◽  
Real Earnings Management ◽  
Economic Value Added ◽  
African Countries ◽  
Discretionary Accrual

Background: Economic value added (EVA) may reflect true performance compared with other conventional accounting indices, it is still measured through financial statements. It is highly probable that EVA motivates managers to manipulate earnings.Aim: The main contribution of this study is the analysis of the association between earnings management and EVA. This study provides shareholders, lenders and creditors (or other categories of investors) with a method for analysing the value of enterprises.Setting: We analyse the association between earnings management through real earnings management (REM) or discretionary accrual (DA) activities and the EVA by African and the Group of Twenty (G20) nations.Methods: The sample for this study was obtained from the COMPUSTAT database between 2009 and 2013. This study also adopted the ordinary least squares (OLS) method.Results: The results indicate that a significantly positive relationship exists between earnings management through DA items and EVA in African nations. In addition, a significantly negative relationship exists between earnings management through DA items or REM activities and EVA in G20 nations.Conclusion: Our results provide critical implications for managers, researchers, investors and regulators of various nations; for example, managers may determine whether to increase the EVA through earnings management, researchers may analyse varying degrees of REM activities and DAs existing in the same nation groups or regulators may determine how to establish laws or rules to prevent earnings management because it is likely that differences in national development, culture or politics exist in these nations.

scholarly journals Effect of earnings management on economic value added: A cross-country study

2016 ◽  
Vol 47 (1) ◽  
pp. 29-36 ◽  
Author(s):  
Zhen-Jia Liu
Keyword(s):  
Earnings Management ◽  
Explanatory Power ◽  
Economic Value ◽  
Value Added ◽  
Trade Agreement ◽  
Real Earnings Management ◽  
Economic Value Added ◽  
The North ◽  
Management Behaviour ◽  
Cross Country

This paper addresses the association between earnings management and economic value added (EVA) among nations of the North American Free Trade Agreement (NAFTA), Association of Southeast Asian Nations (ASEAN), European Union (EU), and those classified as a newly industrialized country (NIC). Furthermore, an analysis of the earnings management behaviour is presented based on data from 2009 to 2013. The results indicated that a significantly inverse relationship exists between earnings management through either discretionary accruals (DAs) or real earnings management (REM) activities and EVA in NAFTA and EU nations. Moreover, a significantly positive relationship exists between earnings management through either DAs or REM and EVA in ASEAN and NIC nations. In addition, REM activities exhibit greater explanatory power among these nations.

scholarly journals Corporate Governance, Earnings Management, and Economic Value Added Indonesian Evidence

2019 ◽  
Author(s):  
Krismiaji . ◽  
Maria Purwantini ◽  
Adi Prabhata
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Economic Value ◽  
Value Added ◽  
Cash Flows ◽  
Least Square ◽  
Real Earnings Management ◽  
Fiscal Year ◽  
Economic Value Added ◽  
Negative Effect

This paper describes the research which investigates the effect of earnings management and corporate governance (CG) on economic value added (EVA) in companies listed on the Indonesia Stock Exchange for the fiscal year ending 31 December 2015 to 2017. Earnings management used in this study is accrual earnings management (MLA) as measured by the Modified Jones Model and real earnings management (MLR) as measured by management earnings operating cash flows. CG is measured by the CG index. Data is obtained by purposive sampling process and comesfromsecondarydatabothfromtheIDXandfromthewebsitesofeachcompany. The research hypothesis was tested using generalized-least square (GLS). The results showed that accrual earnings management had a positive effect on EVA while real earnings management had a negative effect on EVA. The results also show that CG has a negative effect on EVA if tested together with MLA, but CG does not affect EVA if tested together with MLR. This research is expected to contribute to the existing literature by completing and enriching findings on the effect of earnings management and corporate governance on EVA.

scholarly journals The Ability of Traditional and Modern Performance Indicators in Interpreting the Phenomenon of Earnings Management: Evidence Manufacturing Firms in Amman Stock Exchange

2016 ◽  
Vol 8 (1) ◽  
pp. 77 ◽  
Author(s):  
Mohammad A Momani
Keyword(s):  
Earnings Management ◽  
Performance Indicators ◽  
Stock Exchange ◽  
Economic Value ◽  
Value Added ◽  
Manufacturing Firms ◽  
Tobin’S Q ◽  
Economic Value Added ◽  
Tobin's Q ◽  
Amman Stock Exchange

<p>The study objects for investigating the ability of traditional and modern performance indicators in interpreting earnings management phenomena of listed manufacturing firms in the Amman Stock Exchange (ASE), using adjusted Jones method for measuring earnings management. The study takes into considerations three traditional indicators, including; Return on Assets (ROA), Return on Sales (ROS), and Operating Cash Flow, while the Market Value Added (MVA), Tobin's-Q, and Economic Value Added (EVA) are used as modern indicators for financial performance. A sample consisted of 29 firms had been selected, and data covering the period 2006-2013 had been collected from these firms, where 232 observations were used in the analysis. The study found that the earnings management of listed manufacturing firms at (ASE) still practice the phenomenon of earnings management, at low level based on the measures followed by the study, and that there is a significant linear relationship between performance indicators (traditional and modern) and earnings management. The results indicate that there is a significant as well inverse relationship between (ROA) and earnings management. Also, the study found that modern performance indicators are able to interpret earnings management, where the results indicate that there is a significant as well as inverse relationship between (EVA), and (Tobin's-q) and earnings management. One important finding showed that (EVE) is effective and followed by (Tobin's-q) indicator in interpreting the earnings management phenomena. However, the study did not show a significant relationship between CFO, LEV Ratio, ROS, and MVA with earnings management. Based on these results, the study made many recommendations to the interested parties and the most important one is that companies must disclose the economic value added in the financial statements to enable investors and related parties to be aware of the amount of value-added that lead to increase the wealth of shareholders, and to help managers to consider all costs of capital. In addition, these indicators can be used with other indicators such as (ROA, ROE) to evaluate firm’s performance.</p>

scholarly journals EVA and Stock Returns: Are They Correlated?

2016 ◽  
Vol 7 (2) ◽  
pp. 34-51
Author(s):  
Matione Sauro ◽  
Mashamba Tafirei
Keyword(s):  
Stock Returns ◽  
South African ◽  
Firm Value ◽  
Stock Exchange ◽  
Economic Value ◽  
Value Added ◽  
Ordinary Least Squares ◽  
Economic Value Added ◽  
Johannesburg Stock Exchange ◽  
And Performance

The study sought to examine the relationship between economic value-added (EVA) and stock returns in commercial banks listed at the Johannesburg stock exchange. Furthermore, we also investigated other traditional value measures like Dividend per Share and Return on Equity in-order to identify which metric measures firm value better. The data was analysed with the Ordinary Least Squares (OLS) method. Economic value added was found to have significant influence on the financial performance of banks. This explains why traditional performance measures have driven investors to look for alternatives, such as value based measures in most developed economies. Therefore, EVA can be reliably used to measure corporate value and performance simultaneously. This at least should be a good encouragement for South African banks to adopt Eva so as to keep up with local and international competition for foreign capital (FDIs) in global financial markets. Hence, South African banks should consider supplying EVA data when releasing annual performance figures.

scholarly journals Effect of Earnings Management on Economic Value Added: A China Study

2015 ◽  
Vol 4 (3) ◽  
Author(s):  
Yishu Wang ◽  
Xue Jiang ◽  
ZhenJia Liu ◽  
Weixing Wang
Keyword(s):  
Earnings Management ◽  
Economic Value ◽  
Value Added ◽  
Economic Value Added ◽  
China Study

Pengaruh Pengungkapan Corporate Social Responsibility (CSR) Pada Nilai Perusahaan

2011 ◽  
Vol 3 (2) ◽  
pp. 1-19
Author(s):  
Chermian Eforis ◽  
Rosita Suryaningsih
Keyword(s):  
Corporate Social Responsibility ◽  
Annual Report ◽  
Economic Value ◽  
Value Added ◽  
Market Value ◽  
Economic Value Added ◽  
Market Value Added ◽  
Csr Disclosure ◽  
Corporate Social ◽  
Simple Regression

This study aims to determine the influence of the level of CSR disclosure in annual report to corporate values that proxies with Economic Value Added (EVA) and Market Value Added (MVA).   The objects of this study are companies that were included in Kompas 100 Edition of the second review in 2010.The chosen model of this research is simple regression which can be defined as a model that used the normal probability plot  for data normality test, DurbinWatson test for autocorrelation, graph plots to test heteroscedasticity, and saw the value of tolerance and VIF for multicollinearity test. Hypothesis is analyzed using simple regression method  The results showed that the level of CSR disclosure contained in the annual report has a significant influence on the EVA. The same results were also found on the MVA, where the level of CSR disclosure contained in the annual report has a significant influence on the MVA. Key words: Corporate Social Responsibility, Economic Value Added, Market Value Added

KOMPARASI KINERJA KEUANGAN MELALUI PENDEKATAN ECONOMIC VALUE ADDED (EVA) PADA PERUSAHAAN TRANSPORTASI DI JAKARTA

2018 ◽  
Vol 3 ◽  
pp. 223-232
Author(s):  
Dwi Urip Wardoyo
Keyword(s):  
Financial Performance ◽  
Service Industry ◽  
Economic Value ◽  
Value Added ◽  
Added Value ◽  
Economic Value Added ◽  
Test Analysis ◽  
Transportation Service ◽  
Income Statement

This study aims to compare financial performance through profitability generated by two market participants in the witness transportation service industry in Jakarta, namely PT. BB compared to PT. ETU, this assessment is measured not limited to the profit generated but more than that by measuring financial added value through the concept of Eonomic Value Added produced by the two companies. The population in this study were all taxi transportation service companies in Jakarta. The sampling method selected two taxi companies that have the largest market share in DKI Jakarta, namely BB Taxi and ETU Taxi. The test analysis used in this study is ratio analysis through profit calculation and economic added value from the annual income statement. This study shows that there are (a) determination of the ratio of profit levels, (b) Determination of the comparison of economic value added of the two companies. Keywords :  Financial performance, Economic Value Added (EVA)

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