Avoidance of reported earnings decreases and losses: evidence from Malaysia / Norman Mohd Saleh, Takiah Mohd Iskandar and Mohd Mohid Rahmat

Mohd Iskandar, Takiah and Rahmat, Mohd Mohid (2005) Avoidance of reported earnings decreases and losses: evidence from Malaysia / Norman Mohd Saleh, Takiah Mohd Iskandar and Mohd Mohid Rahmat. Malaysian Accounting Review, 4 (1). pp. 25-37. ISSN 1675-4077

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Abstract

The study investigates the existence of earnings management practices by companies listed in the KLSE. Prior studies suggest that managers manage earnings to avoid reporting losses and earnings decreases. This study tests the effects of size and code of corporate governance on the incidence of managing earnings to avoid reporting earnings decrease and losses by Malaysian companies. Using the discontinuity test and level of smoothness test around zero reported earnings, this study finds a significant incidence of companies reporting positive earnings while avoiding showing losses. This finding is consistent with that of previous studies. The study also provides evidence that earnings management practices were reduced following the introduction of a code of corporate governance by the Malaysian government in 2001.

Item Type: Article
Creators:
CreatorsEmail
Mohd Iskandar, TakiahUNSPECIFIED
Rahmat, Mohd MohidUNSPECIFIED
Subjects: H Social Sciences > HG Finance > Financial management. Business finance. Corporation finance > Earnings management > Malaysia
H Social Sciences > HG Finance > Investment, capital formation, speculation > Stock exchanges. Insider trading in securities > Malaysia > Kuala Lumpur. KLSE
Divisions: Accounting Research Institute (ARI)
Journal or Publication Title: Malaysian Accounting Review
ISSN: 1675-4077
Volume: 4
Number: 1
Page Range: pp. 25-37
Item ID: 290
Uncontrolled Keywords: Earnings management, Malaysian listed companies, Kuala Lumpur Stock Exchange (KLSE)
Last Modified: 25 Mar 2019 08:00
Depositing User: Staf Pendigitalan 1
URI: http://ir.uitm.edu.my/id/eprint/290

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