Article2021

Ownership structure and real earnings management: evidence from an emerging market

Shaker Dahan Al-Duais · Mazrah Malek · Mohamad Ali Abdul Hamid · Amal Mohammed Al-Masawa

51 citations0/0 files storedJournal of Accounting in Emerging Economies

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Auditing, Earnings Management, Governance Corporate Finance and Governance Corporate Governance and Financial Management

Abstract

Purpose This study aims to investigate the monitoring role of ownership structure (OWS) on real earnings management (REM) practices; previous studies primarily examined the effect of OWS on accrual-based earnings management. Design/methodology/approach The sample of this study is 490 companies listed on the Malaysian Stock Exchange during the period 2013–2016 (1,960 company-year observations). The regression of a feasible generalized least square was used for data analysis. The authors use three regression models ordinary least squares, panel-corrected standard errors and Driscoll–Kraay standard errors to corroborate the findings and also examine alternative REM measures. Findings Analysis of the data shows that family, foreign and institutional ownership has a positive link with the quality of financial reporting and, to a large extent, is capable of alleviating REM. The findings also indicate that some form of OWS significantly affects REM, corroborating existing theories on corporate governance (CG) and the perspectives of practitioners. Practical implications The evidence concerns the significant role played by the OWS in reducing REM activities. The findings are useful in support of regulatory activities, particularly in the design of policies to regulate the OWS. The results may also provide useful insights to inform other policymakers, investors, shareholders and researchers about the active role of family, foreign and institutional investors in monitoring Malaysia's public listed companies (PLCs) to strengthen CG practices. This also leads to less REM and enhances the quality of financial reporting. Originality/value To the authors' knowledge, this work is pioneering research from a developing country, specifically from Malaysia, to investigate the manner in which all possible OWSs influence REM. More importantly, the study recommends that regulators and researchers do not envisage OWS as a holistic phenomenon.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 51 citations exist upstream.

References

1976Theory of the firm: Managerial behavior, agency costs and ownership structure 1983Separation of Ownership and Control 1997A Survey of Corporate Governance 1991Earnings Management During Import Relief Investigations 1988Management ownership and market valuation 2005The economic implications of corporate financial reporting 2003Earnings Management through Real Activities Manipulation 2003Earnings management and investor protection: an international comparison

Cited by

2021CEO Characteristics, Family Ownership and Corporate Social Responsibility Reporting: The Case of Saudi Arabia 2022Institutional Ownership Types and ESG Reporting: The Case of Saudi Listed Firms 2022Earnings Management and Corporate Performance in the Scope of Firm-Specific Features 2023COVID-19 Pandemic, Internal Audit Function and Audit Report Lag: Evidence from Emerging economy 2023Do CEO duality and expertise affect earnings management behavior? The moderating effect of family ownership

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.