The effectiveness of corporate governance on real earnings management in selected Malaysian companies

The effectiveness of corporate governance on real earnings management in selected Malaysian companies

The practice of real earnings management occurs at companies where investors’ protection is high and stringent corporate governance measures are put to place. The study examines the relationship between corporate governance attributes and real earnings management. In this study real earnings manage...

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Main Author: Olayemi, Badru Bazeet
Format: Thesis
Language:eng
eng
Published: 2013
Subjects:
HF5549-5549.5 Personnel Management
Employment
HG Finance
Online Access:https://etd.uum.edu.my/5062/1/s809965.pdf
https://etd.uum.edu.my/5062/2/s809965_abstract.pdf
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id my-uum-etd.5062
record_format uketd_dc
institution Universiti Utara Malaysia
collection UUM ETD
language eng
eng
advisor Ahmad Zaluki, Nurwati Ashikkin
topic HF5549-5549.5 Personnel Management
Employment
HG Finance
spellingShingle HF5549-5549.5 Personnel Management
Employment
HG Finance
Olayemi, Badru Bazeet
The effectiveness of corporate governance on real earnings management in selected Malaysian companies
description The practice of real earnings management occurs at companies where investors’ protection is high and stringent corporate governance measures are put to place. The study examines the relationship between corporate governance attributes and real earnings management. In this study real earnings management is measured using three proxies, abnormal discretionary expenses, abnormal production cost, and abnormal cash flow from operations. The corporate governance attributes examined are board structure characteristics and audit committee characteristics. The sample consist of top 100 companies rated high based on Malaysia Corporate Governance Index 2011 (MCG Index) on best practices of corporate governance. Financial companies are excluded resulted to a final sample of 78 companies. The relationships of board structure and audit committee are tested using Ordinary Least Square regression. The results reveal that certain corporate governance variables are effective in constraining real earnings management activities. The findings of the hypothesised variables, board structures and audit committee. The study find that only board size and directors expertise constrain earnings management, but none of the audit committee variables show significant relationship with real earnings management. It can be conclude that board size and directors expertise are constraining factors in constraining real earnings management. The finding of the study is important for market participant and policy makers in defining effective corporate governance mechanism that could address the issue of real earnings management
format Thesis
qualification_name masters
qualification_level Master's degree
author Olayemi, Badru Bazeet
author_facet Olayemi, Badru Bazeet
author_sort Olayemi, Badru Bazeet
title The effectiveness of corporate governance on real earnings management in selected Malaysian companies
title_short The effectiveness of corporate governance on real earnings management in selected Malaysian companies
title_full The effectiveness of corporate governance on real earnings management in selected Malaysian companies
title_fullStr The effectiveness of corporate governance on real earnings management in selected Malaysian companies
title_full_unstemmed The effectiveness of corporate governance on real earnings management in selected Malaysian companies
title_sort effectiveness of corporate governance on real earnings management in selected malaysian companies
granting_institution Universiti Utara Malaysia
granting_department Othman Yeop Abdullah Graduate School of Business
publishDate 2013
url https://etd.uum.edu.my/5062/1/s809965.pdf
https://etd.uum.edu.my/5062/2/s809965_abstract.pdf
_version_ 1776103663630024704
spelling my-uum-etd.50622023-02-01T06:34:11Z The effectiveness of corporate governance on real earnings management in selected Malaysian companies 2013 Olayemi, Badru Bazeet Ahmad Zaluki, Nurwati Ashikkin Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HF5549-5549.5 Personnel Management. Employment HG Finance The practice of real earnings management occurs at companies where investors’ protection is high and stringent corporate governance measures are put to place. The study examines the relationship between corporate governance attributes and real earnings management. In this study real earnings management is measured using three proxies, abnormal discretionary expenses, abnormal production cost, and abnormal cash flow from operations. The corporate governance attributes examined are board structure characteristics and audit committee characteristics. The sample consist of top 100 companies rated high based on Malaysia Corporate Governance Index 2011 (MCG Index) on best practices of corporate governance. Financial companies are excluded resulted to a final sample of 78 companies. The relationships of board structure and audit committee are tested using Ordinary Least Square regression. The results reveal that certain corporate governance variables are effective in constraining real earnings management activities. The findings of the hypothesised variables, board structures and audit committee. The study find that only board size and directors expertise constrain earnings management, but none of the audit committee variables show significant relationship with real earnings management. It can be conclude that board size and directors expertise are constraining factors in constraining real earnings management. The finding of the study is important for market participant and policy makers in defining effective corporate governance mechanism that could address the issue of real earnings management 2013 Thesis https://etd.uum.edu.my/5062/ https://etd.uum.edu.my/5062/1/s809965.pdf text eng public https://etd.uum.edu.my/5062/2/s809965_abstract.pdf text eng public masters masters Universiti Utara Malaysia Abbott, L., Parker, S., & Presley, T. (2012). Female Board Presence and the Likelihood of Financial Restatement. Accounting Horizons, Vol. 26, No. 4, pp. 607–629. Abbott, L. J., Parker, S., & Peters, G. F. (2004). Audit committee characteristics and restatements. Auditing: A Journal of Practice & Theory, 23(1), 69-87. Abed, S., Al-Attar, A., & Suwaidan, M. (2012). Corporate governance and earnings management: Jordanian evidence. International Business Research, 5(1), 216-222. Adams, R., & Funk, P. (2012). Beyond the glass ceiling: Does gender matter? Management Science, 58(2), 219-235. 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