Studies on Earnings Management and Financial Statement Fraud in Corporate Firms

Noorul Azwin binti Md Nasir, Muhammad Jahangir Ali and Noorshella binti Che Nawi

Research in World Economy, 2019, vol. 10, issue 2, 15-19

Abstract: The purpose of this paper is to explain the transformation of earnings management into financial statement fraud. Related papers on earnings management and financial statement fraud were intensively reviewed. Although there are some overlaps in both concepts, application of earnings management is not always related to financial statement fraud. Earnings management can occur for a number of reasons, including unintentional errors and legitimate disagreement over GAAP. Results of this study indicate that accounting records are allowed to be managed up to certain hedge. Crossing the hedge would lead the organization to be convicted in illegal financial reporting.

Keywords: earnings management; financial statement; financial statement fraud (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:jfr:rwe111:v:10:y:2019:i:2:p:15-19

DOI: 10.5430/rwe.v10n2p15

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