The causes and effects of earnings management on stock prices
Other Title(s)
أسباب و آثار إدارة الأرباح على أسعار الأسهم
Joint Authors
Wali, Kawa
Salih, Subhi
Paridon, Kees Van
Source
Journal of Economics and Administrative Science
Issue
Vol. 25, Issue 116 (31 Dec. 2019), pp.94-110, 17 p.
Publisher
University of Baghdad College of Administration and Economics
Publication Date
2019-12-31
Country of Publication
Iraq
No. of Pages
17
Main Subjects
Topics
Abstract EN
This study uses the performance of the discretionary estimation models by using a sample of listed companies in the Netherlands and Germany.
The actual accounting framework provides a wide opportunity for managers to influence data in financial reporting.
The corporate reporting strategy, the way managers use their discretionary accounting, has a significant effect on the company's financial reporting.
The authors contribute to the literature through enhancement to these models to accomplish better effects of identifying earnings management as well as to present evidence that is particular to the Dutch and German setting.
For this, we followed the methodology of Dechow, Sloan, and Sweeney (1995) and Chan et al.
(2006) and test which model can detect Dutch and German firm’s earnings management better by applying those models to the artificially manipulated earnings after adding some amount to the reported earnings.
This investigation found that earnings are managed relatively more in Germany than in the Netherlands.
The relationship between earnings management, stock returns, and corporate governance has been tested.
Our results suggested that the strong or weak impact of corporate governance in these two countries varied.
The multi-sectoral Jones model has a modest illustrative capacity.
Finally, the results show that maximum discretionary accruals involve a large number of estimated errors which have foreseeable effect on income, stock returns and future cash flows.
The decrease in level of earnings management indicates that the measurement error has been largely eliminated in the estimated performance -related accruals.
American Psychological Association (APA)
Wali, Kawa& Salih, Subhi& Paridon, Kees Van. 2019. The causes and effects of earnings management on stock prices. Journal of Economics and Administrative Science،Vol. 25, no. 116, pp.94-110.
https://search.emarefa.net/detail/BIM-948531
Modern Language Association (MLA)
Wali, Kawa…[et al.]. The causes and effects of earnings management on stock prices. Journal of Economics and Administrative Science Vol. 25, no. 116 (Dec. 2019), pp.94-110.
https://search.emarefa.net/detail/BIM-948531
American Medical Association (AMA)
Wali, Kawa& Salih, Subhi& Paridon, Kees Van. The causes and effects of earnings management on stock prices. Journal of Economics and Administrative Science. 2019. Vol. 25, no. 116, pp.94-110.
https://search.emarefa.net/detail/BIM-948531
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references : p. 107-109
Record ID
BIM-948531