Real earnings management and firm value: Empirical evidence from Malaysia / Mohd Taufik Mohd Suffian, Zuraidah Mohd Sanusi and Nor'Azam Mastuki

Mohd Suffian, Mohd Taufik and Mohd Sanusi, Zuraidah and Mastuki, Nor'azam (2015) Real earnings management and firm value: Empirical evidence from Malaysia / Mohd Taufik Mohd Suffian, Zuraidah Mohd Sanusi and Nor'Azam Mastuki. Malaysian Accounting Review, 14 (1). pp. 26-47. ISSN 1675-4077

Official URL: https://mar.uitm.edu.my/

Abstract

This research was conducted to study the connection between real earnings management (REM) activities and firm value. A sample of 6,216 suspected firms was collected from 2004 to 2011, We derived the relationship using the methods applied by Roychowdhury (2006).
Using linear regression to determine the relationship of each REM activity of suspected firms with the firm value, we found a significant positive relationship between REM activities and firm value. When firms had more REM activities, the firm value increased. This outcome was caused by the existence of information asymmetry, which creates a friction between managers and shareholders, A significant relationship was also observed between leverage and firm value as well as between size and firm value. Thus, REM activities were concluded to increase
firms' value.

Metadata

Item Type: Article
Creators:
Creators
Email / ID Num.
Mohd Suffian, Mohd Taufik
UNSPECIFIED
Mohd Sanusi, Zuraidah
UNSPECIFIED
Mastuki, Nor'azam
noraz562@salam.uitm.edu.my
Subjects: H Social Sciences > HD Industries. Land use. Labor > Corporations
H Social Sciences > HF Commerce > Accounting. Bookkeeping > Periodicals. Societies. Serials
Divisions: Universiti Teknologi MARA, Shah Alam > Accounting Research Institute (ARI)
Journal or Publication Title: Malaysian Accounting Review
UiTM Journal Collections: UiTM Journal > Management & Accounting Review (MAR)
ISSN: 1675-4077
Volume: 14
Number: 1
Page Range: pp. 26-47
Keywords: Real earnings management; Firm value; Information asymmetry
Date: 2015
URI: https://ir.uitm.edu.my/id/eprint/14340
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14340

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