IFRS convergence and earnings management: Malaysian evidence

IFRS convergence and earnings management: Malaysian evidence

The study sheds light on whether IFRS convergence would reduce the extent of earnings management, which in turns delivers higher quality of financial statement information to its users. Besides, the study also investigates the explanatory factors of earnings management before and after IFRS conver...

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Main Author: Khoo, Chun Peng
Format: Thesis
Language:eng
eng
Published: 2013
Subjects:
HF5601-5689 Accounting
Online Access:https://etd.uum.edu.my/5063/1/s811883.pdf
https://etd.uum.edu.my/5063/2/s811883_abstract.pdf
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id my-uum-etd.5063
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institution Universiti Utara Malaysia
collection UUM ETD
language eng
eng
advisor Ahmad Zaluki, Nurwati Ashikkin
topic HF5601-5689 Accounting
spellingShingle HF5601-5689 Accounting
Khoo, Chun Peng
IFRS convergence and earnings management: Malaysian evidence
description The study sheds light on whether IFRS convergence would reduce the extent of earnings management, which in turns delivers higher quality of financial statement information to its users. Besides, the study also investigates the explanatory factors of earnings management before and after IFRS convergence. The sample of the study consists of 231 Malaysian listed companies. The time frame of the study is year 2005 (i.e., pre-IFRS convergence) and year 2006 (i.e., post-IFRS convergence). Kothari’s discretionary accruals model is used in the study to measure the extent of earnings management. By examining the extent of earnings management in two different periods (i.e., pre-IFRS convergence & post-IFRS convergence), the study finds that IFRS convergence reduces the extent of earnings management among Malaysian listed companies. In addition, the findings reveal that the explanatory factors of earnings management remain unchanged after IFRS convergence. The findings report that the proportion of non-political connected directors on boards is significant positively associated with earnings management before and after IFRS convergence. In addition, the study also finds that the proportion of independent external directors on board, board size, audit quality, foreign stock market listing and ethnicity do not have any association with earnings management before and after IFRS convergence. Among the control variables, the study reveals that company size is significant negatively associated with earnings management before IFRS convergence. Besides, the study also reports that profitability is significant positively associated with earnings management before and after IFRS convergence. This study has implications for regulatory bodies, tasking them to look into the effects of IFRS convergence on the extent of earnings management, particularly in an Asian country–Malaysia
format Thesis
qualification_name masters
qualification_level Master's degree
author Khoo, Chun Peng
author_facet Khoo, Chun Peng
author_sort Khoo, Chun Peng
title IFRS convergence and earnings management: Malaysian evidence
title_short IFRS convergence and earnings management: Malaysian evidence
title_full IFRS convergence and earnings management: Malaysian evidence
title_fullStr IFRS convergence and earnings management: Malaysian evidence
title_full_unstemmed IFRS convergence and earnings management: Malaysian evidence
title_sort ifrs convergence and earnings management: malaysian evidence
granting_institution Universiti Utara Malaysia
granting_department Othman Yeop Abdullah Graduate School of Business
publishDate 2013
url https://etd.uum.edu.my/5063/1/s811883.pdf
https://etd.uum.edu.my/5063/2/s811883_abstract.pdf
_version_ 1747827854715912192
spelling my-uum-etd.50632016-04-17T07:38:32Z IFRS convergence and earnings management: Malaysian evidence 2013 Khoo, Chun Peng Ahmad Zaluki, Nurwati Ashikkin Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HF5601-5689 Accounting The study sheds light on whether IFRS convergence would reduce the extent of earnings management, which in turns delivers higher quality of financial statement information to its users. Besides, the study also investigates the explanatory factors of earnings management before and after IFRS convergence. The sample of the study consists of 231 Malaysian listed companies. The time frame of the study is year 2005 (i.e., pre-IFRS convergence) and year 2006 (i.e., post-IFRS convergence). Kothari’s discretionary accruals model is used in the study to measure the extent of earnings management. By examining the extent of earnings management in two different periods (i.e., pre-IFRS convergence & post-IFRS convergence), the study finds that IFRS convergence reduces the extent of earnings management among Malaysian listed companies. In addition, the findings reveal that the explanatory factors of earnings management remain unchanged after IFRS convergence. The findings report that the proportion of non-political connected directors on boards is significant positively associated with earnings management before and after IFRS convergence. In addition, the study also finds that the proportion of independent external directors on board, board size, audit quality, foreign stock market listing and ethnicity do not have any association with earnings management before and after IFRS convergence. Among the control variables, the study reveals that company size is significant negatively associated with earnings management before IFRS convergence. Besides, the study also reports that profitability is significant positively associated with earnings management before and after IFRS convergence. This study has implications for regulatory bodies, tasking them to look into the effects of IFRS convergence on the extent of earnings management, particularly in an Asian country–Malaysia 2013 Thesis https://etd.uum.edu.my/5063/ https://etd.uum.edu.my/5063/1/s811883.pdf text eng validuser https://etd.uum.edu.my/5063/2/s811883_abstract.pdf text eng public masters masters Universiti Utara Malaysia Abdul Rahman, R., & Mohamed Ali, F. H. (2006). Board, audit committee, culture and earnings management: Malaysian evidence. Managerial Auditing Journal, 21 (7), 783-804. Abdul Wahab, E. A., Mat Zain, M., & James, K. (2011). Political connections, corporate governance and audit fees in Malaysia. Managerial Auditing Journal, 26 (5), 393-418. Abdullah, Z., Shaari, H., Abdul Aziz, S., Abu Bakar, F., Sawandi, N., Sharif, Z., et al. (2009). 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