Earnings manipulation behavior in the banking industry of Bangladesh: the strategical implication of Beneish M-score model

Asia Khatun, Ratan Ghosh and Sadman Kabir

Arab Gulf Journal of Scientific Research, 2022, vol. 40, issue 3, 302-328

Abstract: Purpose - This study aims to determine the number of companies involved in earnings manipulation. Additionally, this study has empirically investigated the common manipulation items among the companies. Design/methodology/approach - Bangladesh's listed commercial banks are selected as a sample for this study, and financial data from 2009 to 2018 were collected. The likely and nonlikely manipulator Beneish model (1999) divides the sample into two groups. Based on the M-score of the model, the banks are put into two groups. To identify the most influential variables, an independent samplet-test was done with the help of Statistical Package for Social Sciences (SPSS). Findings - The findings show that banks in Bangladesh have an unstable trend in making manipulated financial reports. Results of thet-test reveal that overstating revenues, increasing intangible assets, lessening cost and accruals are the most appealing items for preparing a fraudulent financial report. The findings of this research work will help the investors take the right decision having the idea of manipulation in the banking sector of Bangladesh. Originality/value - In the presence of many irregularities in the banking sector Bangladesh, very few studies have been carried out in forensic accounting and fraudulent financial reporting practices. Much research has focused on earnings management techniques. This research specifically focuses on identifying earnings manipulation in financial statements for micro-level variables like accounting accruals, intangible assets, etc. This will help policy-makers and financial statement readers to be proactive while reading financial statements and taking any investment decision.

Keywords: Fraud; Earnings manipulation; Beneish M-score model; Banking industry; Bangladesh (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:agjsrp:agjsr-03-2022-0001

DOI: 10.1108/AGJSR-03-2022-0001

Access Statistics for this article

Arab Gulf Journal of Scientific Research is currently edited by Prof. Soud Mohammed Almahamid

More articles in Arab Gulf Journal of Scientific Research from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().