Earnings Management, Board Composition and Earnings Persistence in Emerging Market

Nguyen Vinh Khuong, Abdul Aziz Abdul Rahman, Pham Quoc Thuan, Nguyen Thanh Liem, Le Huu Tuan Anh, Cao Thi Mien Thuy and Huynh Thi Ngoc Ly
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Nguyen Vinh Khuong: Faculty of Accounting and Auditing, University of Economics and Law, Ho Chi Minh City 700000, Vietnam
Abdul Aziz Abdul Rahman: College of Business Administration, Kingdom University, Riffa 40434, Bahrain
Pham Quoc Thuan: Faculty of Accounting and Auditing, University of Economics and Law, Ho Chi Minh City 700000, Vietnam
Nguyen Thanh Liem: Vietnam National University, Ho Chi Minh City 700000, Vietnam
Le Huu Tuan Anh: Faculty of Accounting and Auditing, University of Economics and Law, Ho Chi Minh City 700000, Vietnam
Cao Thi Mien Thuy: Vietnam National University, Ho Chi Minh City 700000, Vietnam
Huynh Thi Ngoc Ly: Vietnam National University, Ho Chi Minh City 700000, Vietnam

Sustainability, 2022, vol. 14, issue 3, 1-15

Abstract: Income data are useful for making economic decisions and anticipating future revenues. Earning quality, or the utility of earnings in making decisions, is determined by real economic performance. Firms with greater performance should, on average, have higher profits quality. Managers, investors, and scholars are interested in the influence of earnings management (EM) on earnings persistence (EP). This study evaluates the relationship between these variables in terms of accrual, real EM, board composition, and EP. We conducted quantitative research using GMM regression on a sample of 228 listed businesses in the Vietnamese stock market from 2014 to 2017. Our findings indicate that accrual earnings management (AEM) is associated with a negative connection with EP, but real earnings management (REM) is associated with a mixed association with EP. Additionally, the data indicate that board of directors (BODs) play a critical role in EP. Our research contributes to the existing body of knowledge by establishing a foundation for future research in this subject and by proposing some feasible options for functional government agencies and enterprise management interested in enhancing EP.

Keywords: accrual earnings management; real earnings management; board composition; earnings persistence (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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