Empirical study on the relationship between income smoothing and shareholders wealth among Malaysian listed companies / Ruslaina Haji Yusoff

This research was carried out to identify the income smoothing and non-smoothing companies listed in the KLSE first board using Eckel's Index (1981) and to examine the relationship between the income smoothing and shareholder wealth (companies' share price). 298 listed companies have be...

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Main Author:	Yusoff, Ruslaina
Format:	Thesis
Language:	English
Published:	2001
Subjects:	Profit
Online Access:	https://ir.uitm.edu.my/id/eprint/3202/1/TM_RUSLAINA%20HJ%20YUSOFF%20AC%2001_5%201.pdf
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id	my-uitm-ir.3202
record_format	uketd_dc
spelling	my-uitm-ir.32022016-08-05T00:21:59Z Empirical study on the relationship between income smoothing and shareholders wealth among Malaysian listed companies / Ruslaina Haji Yusoff 2001 Yusoff, Ruslaina Profit Investment, capital formation, speculation This research was carried out to identify the income smoothing and non-smoothing companies listed in the KLSE first board using Eckel's Index (1981) and to examine the relationship between the income smoothing and shareholder wealth (companies' share price). 298 listed companies have been selected as samples in the current study. Income before extraordinary items (El), pretax income (PI) and net income (NI) are used as an income measurement in Eckel's Index. Based on descriptive statistic, it was found that there are more smoothing than non-smoothing companies, based on all three income measurement. Based on t-test and Wilcoxon sign-rank test, the results indicated that there is no significant difference between cumulative abnormal return for smoothing and nonsmoothing companies at any income measurement (El, PI and NI). Furthermore, when size (measured by market equity) is examined between smoothing and non-smoothing companies, it was found that income smoothing does not depend on the size of the company. Further test indicates that there is no significant difference between cumulative abnormal return of large and small companies. Based on the results obtained from ANOVA, it showed that there is no significant difference of cumulative abnormal return between groups when income before extraordinary items and pretax income was used as income measurement in detecting the presence of income smoothing. However, there was a difference in cumulative abnormal return between industries when net income was being used as an income measurement. The univariate regression confirms the earlier result that there is no significant relationship between cumulative abnormal returns, income smoothing, firm size and industry. Thus, the result in the current study provides evidence that there is more smoothing than non-smoothing companies. However, investors in Malaysia during the study period (1994 - 1999) seem to ignore the smooth income streams. Thus, improvement in shareholders wealth is not the motivation for smoothing in Malaysia. 2001 Thesis https://ir.uitm.edu.my/id/eprint/3202/ https://ir.uitm.edu.my/id/eprint/3202/1/TM_RUSLAINA%20HJ%20YUSOFF%20AC%2001_5%201.pdf text en public masters Universiti Teknologi MARA Faculty of Accountancy
institution	Universiti Teknologi MARA
collection	UiTM Institutional Repository
language	English
topic	Profit Profit
spellingShingle	Profit Profit Yusoff, Ruslaina Empirical study on the relationship between income smoothing and shareholders wealth among Malaysian listed companies / Ruslaina Haji Yusoff
description	This research was carried out to identify the income smoothing and non-smoothing companies listed in the KLSE first board using Eckel's Index (1981) and to examine the relationship between the income smoothing and shareholder wealth (companies' share price). 298 listed companies have been selected as samples in the current study. Income before extraordinary items (El), pretax income (PI) and net income (NI) are used as an income measurement in Eckel's Index. Based on descriptive statistic, it was found that there are more smoothing than non-smoothing companies, based on all three income measurement. Based on t-test and Wilcoxon sign-rank test, the results indicated that there is no significant difference between cumulative abnormal return for smoothing and nonsmoothing companies at any income measurement (El, PI and NI). Furthermore, when size (measured by market equity) is examined between smoothing and non-smoothing companies, it was found that income smoothing does not depend on the size of the company. Further test indicates that there is no significant difference between cumulative abnormal return of large and small companies. Based on the results obtained from ANOVA, it showed that there is no significant difference of cumulative abnormal return between groups when income before extraordinary items and pretax income was used as income measurement in detecting the presence of income smoothing. However, there was a difference in cumulative abnormal return between industries when net income was being used as an income measurement. The univariate regression confirms the earlier result that there is no significant relationship between cumulative abnormal returns, income smoothing, firm size and industry. Thus, the result in the current study provides evidence that there is more smoothing than non-smoothing companies. However, investors in Malaysia during the study period (1994 - 1999) seem to ignore the smooth income streams. Thus, improvement in shareholders wealth is not the motivation for smoothing in Malaysia.
format	Thesis
qualification_level	Master's degree
author	Yusoff, Ruslaina
author_facet	Yusoff, Ruslaina
author_sort	Yusoff, Ruslaina
title	Empirical study on the relationship between income smoothing and shareholders wealth among Malaysian listed companies / Ruslaina Haji Yusoff
title_short	Empirical study on the relationship between income smoothing and shareholders wealth among Malaysian listed companies / Ruslaina Haji Yusoff
title_full	Empirical study on the relationship between income smoothing and shareholders wealth among Malaysian listed companies / Ruslaina Haji Yusoff
title_fullStr	Empirical study on the relationship between income smoothing and shareholders wealth among Malaysian listed companies / Ruslaina Haji Yusoff
title_full_unstemmed	Empirical study on the relationship between income smoothing and shareholders wealth among Malaysian listed companies / Ruslaina Haji Yusoff
title_sort	empirical study on the relationship between income smoothing and shareholders wealth among malaysian listed companies / ruslaina haji yusoff
granting_institution	Universiti Teknologi MARA
granting_department	Faculty of Accountancy
publishDate	2001
url	https://ir.uitm.edu.my/id/eprint/3202/1/TM_RUSLAINA%20HJ%20YUSOFF%20AC%2001_5%201.pdf
_version_	1783733094774210560

Empirical study on the relationship between income smoothing and shareholders wealth among Malaysian listed companies / Ruslaina Haji Yusoff

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