The Influence of Monitoring Mechanisms and Opportunistic Behaviors Toward Earnings Management

Aziani Idris, Zuraidah Mohd Sanusi and Mohd Taufik Mohd Suffian ()
Additional contact information
Aziani Idris: Universiti Teknologi Mara (UiTM) & Accounting Research Institute (ARI)
Zuraidah Mohd Sanusi: Accounting Research Institute (ARI) & Universiti Teknologi Mara (UiTM)
Mohd Taufik Mohd Suffian: Universiti Teknologi Mara (UiTM) & Accounting Research Institute (ARI)

Chapter Chapter 13 in A New Paradigm for International Business, 2015, pp 247-269 from Springer

Abstract: Abstract Corporate collapse which resulted from financial scandals keeps increasing in numbers. This study examines the influence of monitoring mechanisms and opportunistic behaviors toward earnings management (EM). Discretionary accrual is a proxy of EM in this study. Monitoring behaviors are proxied by two variables named leverage and dividend. Opportunistic behaviors are proxied by free cash flow (FCF) and profitability (ROA). 481 companies listed in Bursa Malaysia were collected, while another 401 public companies were collected from the Australian Stock Exchange. Several statistical analyses were carried out to examine the influence of monitoring mechanisms (leverage and dividend) and opportunistic behaviors (free cash flow and profitability) toward EM. The findings of this study revealed that only opportunistic behaviors have significant influence on EM in Malaysia. However, for Australia, the result indicated that only one determinant of monitoring mechanisms (dividend) has significant relationship with EM. The same goes to opportunistic behaviors, which indicated that only FCF has significant relationship with EM. For pool data countries, the result revealed that the hypotheses were also partially supported by both monitoring mechanisms and opportunistic behaviors toward EM.

Keywords: Monitoring mechanism; Opportunistic behaviors; Leverage; Dividend; Free cash flow; Profitability; Earnings management (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:spr:prbchp:978-981-287-499-3_13

Ordering information: This item can be ordered from
http://www.springer.com/9789812874993

DOI: 10.1007/978-981-287-499-3_13

Access Statistics for this chapter

More chapters in Springer Proceedings in Business and Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().