Insider Ownership And Earnings Management

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The Effect of Shareholder Rights and Insider Ownership on Earnings Management

Author : Henry He Huang
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Book Synopsis The Effect of Shareholder Rights and Insider Ownership on Earnings Management by : Henry He Huang

Download or read book The Effect of Shareholder Rights and Insider Ownership on Earnings Management written by Henry He Huang and published by . This book was released on 2017 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines whether shareholder rights, which enable shareholders to replace managers, can constrain earnings management and whether this effect is conditional on the level of insider ownership. Using the comprehensive shareholder rights measure constructed by Gompers, Ishii, and Metrick (2003), we find that firms with stronger shareholder rights are associated with less income-increasing discretionary accruals, suggesting that stronger shareholder rights deter managers from reporting aggressive earnings. More importantly, we investigate whether this association is conditional on the level of insider ownership. If insider ownership introduces managerial entrenchment, managers with higher ownership would be insulated from shareholder discipline. Consistent with this entrenchment theory, we find that the association between shareholder rights and earnings management becomes insignificant in the presence of higher levels of insider ownership. Shareholder rights are negatively associated with earnings management only when insider ownership is low. Our results indicate that the disciplinary effect of shareholder rights can be attenuated by high levels of insider ownership.

Comparative Research on Earnings Management, Corporate Governance, and Economic Value

Author : Vieira, Elisabete S.
Publisher : IGI Global
ISBN 13 : 1799875989
Total Pages : 433 pages
Book Rating : 4.7/5 (998 download)

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Book Synopsis Comparative Research on Earnings Management, Corporate Governance, and Economic Value by : Vieira, Elisabete S.

Download or read book Comparative Research on Earnings Management, Corporate Governance, and Economic Value written by Vieira, Elisabete S. and published by IGI Global. This book was released on 2021-02-12 with total page 433 pages. Available in PDF, EPUB and Kindle. Book excerpt: New trends are emerging regarding earnings management and corporate governance showing similarities and striking differences in the practices of different countries and economies. These new trends currently shape the field of modern corporate governance with crucial issues being looked at in governance law and practices, accounting systems, earnings quality and management, stakeholder involvement, and more. In order to advance these new avenues in corporate governance, research looks at accounting policies firms use in different opportunistic circumstances in order to manage earnings, the corporate governance practices in different countries, firm performance, and other dimensions of companies. The understanding of these topics is beneficial in understanding the current state of different types of firms and their practices in modern times. Comparative Research on Earnings Management, Corporate Governance, and Economic Value is focused on the investigation of key challenges and perspectives of corporate governance and earnings management and outlines possible scenarios of its development. The chapters explore this new avenue of research and cover theoretical, empirical, and experimental studies related to different themes in the global context of earnings management and corporate governance. This book is ideal for economists, businesses, managers, accountants, practitioners, stakeholders, researchers, academicians, and students who are interested in the current issues and advancements in corporate governance and earnings management.

Insider Ownership, Earnings Management and Earnings Thresholds

Author : 楊美玲
Publisher :
ISBN 13 :
Total Pages : 64 pages
Book Rating : 4.:/5 (712 download)

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Book Synopsis Insider Ownership, Earnings Management and Earnings Thresholds by : 楊美玲

Download or read book Insider Ownership, Earnings Management and Earnings Thresholds written by 楊美玲 and published by . This book was released on 2009 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Insider Ownership and Earnings Management

Author : Aminuddin Sharifudin
Publisher :
ISBN 13 :
Total Pages : 136 pages
Book Rating : 4.:/5 (467 download)

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Book Synopsis Insider Ownership and Earnings Management by : Aminuddin Sharifudin

Download or read book Insider Ownership and Earnings Management written by Aminuddin Sharifudin and published by . This book was released on 2009 with total page 136 pages. Available in PDF, EPUB and Kindle. Book excerpt:

The Impact of Insider Ownership Stake Changes at the IPO and Earnings Management on Post-IPO Operating Performance

Author : Alex Leum Han
Publisher :
ISBN 13 :
Total Pages : 44 pages
Book Rating : 4.:/5 (654 download)

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Book Synopsis The Impact of Insider Ownership Stake Changes at the IPO and Earnings Management on Post-IPO Operating Performance by : Alex Leum Han

Download or read book The Impact of Insider Ownership Stake Changes at the IPO and Earnings Management on Post-IPO Operating Performance written by Alex Leum Han and published by . This book was released on 2010 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: Past academic research reports that post-IPO operating performance can be signaled through or explained by company characteristics in a period immediately preceding or following the IPO. This paper examines whether post-IPO operating performance is correlated with earnings management activities immediately preceding and following the IPO, insider ownership retention rates after the IPO, and percentage of insider ownership changes at the IPO. I also test whether aggressive earnings managers experience worse operating performance measured by operating income over total assets than conservative earnings managers. The results from various regression analyses and t-tests in this paper show that earnings management activities immediately preceding and following the IPO and insider ownership retention rates are not correlated with post-IPO operating performance. However, this paper reports a statistically negative relationship between percentage of insider ownership changes at the IPO and post-IPO operating performance in the issue year.

Constraints to Earnings Management

Author : Paul Miles Clikeman
Publisher :
ISBN 13 :
Total Pages : 230 pages
Book Rating : 4.:/5 (89 download)

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Book Synopsis Constraints to Earnings Management by : Paul Miles Clikeman

Download or read book Constraints to Earnings Management written by Paul Miles Clikeman and published by . This book was released on 1995 with total page 230 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Common Institutional Ownership and Earnings Management

Author : Santhosh Ramalingegowda
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Common Institutional Ownership and Earnings Management by : Santhosh Ramalingegowda

Download or read book Common Institutional Ownership and Earnings Management written by Santhosh Ramalingegowda and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the relation between earnings management and block ownership of same-industry peer firms by a common set of institutional investors (common institutional ownership). This relation is important given the tremendous growth of common institutional ownership and the significant influence of blockholders on financial reporting. We hypothesize that common institutional ownership mitigates earnings management by enhancing institutions' monitoring efficiency and by encouraging institutions to internalize the negative externality of a firm's earnings management on peer firms' investments. Consistent with our hypothesis, we find that higher common institutional ownership is related to less earnings management. Analyses of a quasi-natural experiment based on financial institution mergers show that this negative relation is unlikely to be driven by the endogeneity of common institutional ownership. Cross-sectional tests provide evidence that the negative relation is stronger among firms for which common institutional ownership is likely to generate a greater reduction in institutions' information acquisition and processing costs, and among firms whose severe financial misstatements are more likely to distort co-owned peer firms' investments, supporting both mechanisms underlying our hypothesis. Our findings inform the ongoing debate on the costs and benefits of common institutional ownership by highlighting an important benefit: the enhanced monitoring of financial reporting.

Real Earnings Management and Corporate Governance

Author : Cristhian Mellado
Publisher :
ISBN 13 :
Total Pages : 31 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Real Earnings Management and Corporate Governance by : Cristhian Mellado

Download or read book Real Earnings Management and Corporate Governance written by Cristhian Mellado and published by . This book was released on 2018 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyses the impact of both, the ownership structure features and the institutional settings, on real-based activities manipulation based on a sample of listed companies in the underexplored Latin American market for the period of 2004-2016. Using panel data based-GMM system estimator technique, the results confirm some previous literature that the monitoring role of the majority owner is crucial in mitigating the opportunistic behavior of managers in engaging in real activities manipulation that reduces the informative content of financial statements. However, the analysis of the insider ownership revealed the negative impact on transparency that entrenched managers cause. In this case, we observed that as insider ownership increases, managers engage more actively in real earnings management. Other corporate governance tools like the institutional ownership and the quality of the regulatory system demonstrated to be effective mechanisms in reducing the real activities manipulation. Taken together, our results mean that in institutional settings characterized by weak protection of the investors and possible conflicts of interests among shareholders, the oversight by majority shareholder in conjunction with the legal and regulatory framework becomes an important governance mechanism that reduces the managerial discretionary decision making concerning the quality of reported earnings.

Institutional Investors, Long-term Investment, and Earnings Management

Author : Brian J. Bushee
Publisher :
ISBN 13 :
Total Pages : 238 pages
Book Rating : 4.3/5 (91 download)

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Book Synopsis Institutional Investors, Long-term Investment, and Earnings Management by : Brian J. Bushee

Download or read book Institutional Investors, Long-term Investment, and Earnings Management written by Brian J. Bushee and published by . This book was released on 1997 with total page 238 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the influence of institutional investors on the incentives of corporate managers to alter long-term investment for earnings management purposes. Many critics argue that the short-term focus of institutional investors encourages managers to sacrifice long-term investment to meet current earnings targets. Others argue that the large stockholdings and sophistication of institutions allow them to fulfill a monitoring role in preventing such myopicinvestment behavior. I examine these competing views by testing whether institutional ownership affects R&D spending for firms that could reverse a decline in earnings with a reduction in R&D. The results indicate that managers are less likely to cut R&D to reverse an earnings decline when institutional ownership is high, implying that institutions typically serve a monitoring role relative to individual investors. However, I find that a high proportion of ownership by institutions exhibiting "transient" ownership behavior (i.e., high portfolio turnover and momentum trading) significantly increases the probability that managers reduce R&D to boost earnings. These results indicate that high turnover and momentum trading by institutional investors can encourage myopic investment behavior when such institutional investors have extremely high levels of ownership in a firm; otherwise, institutional ownership serves to reduce pressures on managers for myopic investment behavior.

Insider Control, Group Affiliation and Earnings Management in Emerging Economies

Author : Jayati Sarkar
Publisher :
ISBN 13 :
Total Pages : 59 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Insider Control, Group Affiliation and Earnings Management in Emerging Economies by : Jayati Sarkar

Download or read book Insider Control, Group Affiliation and Earnings Management in Emerging Economies written by Jayati Sarkar and published by . This book was released on 2019 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a sample of group affiliated and standalone firms for the years 2001-06 from India, a large emerging economy dominated by family business groups and firms with concentrated ownership, we examine the relationship between insider control and opportunistic earnings management with specific focus on the effect of business group affiliation on this relationship. We test the alignment and the entrenchment hypotheses by examining opportunistic earnings management. We further examine if such behavior is influenced by the complexity of ownership structures that are manifested in incomplete and fragmented information about ownership stakes. Our results indicate that a non-linear U-shaped relationship exists between insider control and opportunistic earnings management and that this relationship is stronger for group affiliated firms as compared to that for standalones. Finally, incomplete and fragmented ownership information is found to be strongly related to opportunistic earnings management in group affiliated firms. Our results highlight that both insider control and group affiliation may independently influence agency costs in emerging economies. This in turn calls for policy actions that focus not only on individual firms but on business groups as consolidated identities.

On the Association between Institutional Ownership and Aggressive Corporate Earnings Management in Australia

Author : Ping-Sheng Koh
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis On the Association between Institutional Ownership and Aggressive Corporate Earnings Management in Australia by : Ping-Sheng Koh

Download or read book On the Association between Institutional Ownership and Aggressive Corporate Earnings Management in Australia written by Ping-Sheng Koh and published by . This book was released on 2003 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the association between institutional ownership and Australian firms' aggressive earnings management strategies. In contrast to similar studies, this study does not assume that the two views on how institutional ownership associates with firms' earnings management behaviour are mutually exclusive. The association between institutional ownership and firms' income increasing discretionary accruals is expected to vary as the level of institutional ownership increases. The results support the predicted non-linear association between institutional ownership and income increasing discretionary accruals. In particular, a positive association is found at the lower institutional ownership levels, consistent with the view that transient (short-term oriented) institutional investors create incentives for managers to manage earnings upwards. On the other hand, a negative association is found at the higher institutional ownership levels, consistent with the view that long-term oriented institutional investors' monitoring limits managerial accruals discretion. These findings suggest that institutional investors can act as a complementary corporate governance mechanism in mitigating myopic aggressive earnings management by corporations when they have a sufficiently high ownership level.

Insider Trading and Incentives to Manage Earnings

Author : Messod D. Beneish
Publisher :
ISBN 13 :
Total Pages : 52 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Insider Trading and Incentives to Manage Earnings by : Messod D. Beneish

Download or read book Insider Trading and Incentives to Manage Earnings written by Messod D. Beneish and published by . This book was released on 2014 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper evaluates two hypotheses about the relation between insider selling and earnings management in periods preceding poor corporate performance. Consistent with our litigation avoidance hypothesis, we provide evidence that managers manage earnings upwards after they have engaged in abnormally high levels of insider selling. In contrast, we find no support for the pump and dump hypothesis of earnings being managed before managers sell their equity. Our findings indicate insider trading provides managers with incentives to subsequently manage earnings upward, to distance their selling from the revelation of bad news and reduce the likelihood of reputation, employment, and litigation losses. We show these incentives co-exist and complement incentives to avoid default in a sample of 462 firms that experience technical default in 1983-1997. Our findings suggest that investors and those with oversight authority (e.g., boards of directors, auditors, and regulators) consider monitoring prior rather than contemporaneous insider-trading activity as a part of their corporate governance practices.

Perspectives, Trends, and Applications in Corporate Finance and Accounting

Author : Zopounidis, Constantin
Publisher : IGI Global
ISBN 13 : 1522561153
Total Pages : 372 pages
Book Rating : 4.5/5 (225 download)

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Book Synopsis Perspectives, Trends, and Applications in Corporate Finance and Accounting by : Zopounidis, Constantin

Download or read book Perspectives, Trends, and Applications in Corporate Finance and Accounting written by Zopounidis, Constantin and published by IGI Global. This book was released on 2018-06-29 with total page 372 pages. Available in PDF, EPUB and Kindle. Book excerpt: Financial analyses, investments, and accounting practices are continually developing and improving areas that have seen significant advancements in the past century. However, the recent bankruptcies by major banks, the debt crisis in the European Union, and the economic turmoil in several countries have caused severe downfalls in financial markets and financial systems worldwide. As the world works to recover, it is important to learn from these financial crises to ensure a more secure and sustainable outlook for organizations and the global future. Perspectives, Trends, and Applications in Corporate Finance and Accounting is a crucial resource providing coverage on the stock market, public deficits, investment firms’ performances, banking systems, and global economic trends. This publication highlights areas including, but not limited to, the relationship between the stock market and macroeconomics, earnings management, and pricing models while also discussing previous financial crises. This book is a vital reference work for accountants, financial experts, investment firms, corporate leaders, researchers, and policy makers.

Insider Trading and Earnings Management

Author : Julia Sawicki
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Insider Trading and Earnings Management by : Julia Sawicki

Download or read book Insider Trading and Earnings Management written by Julia Sawicki and published by . This book was released on 2007 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyzes the relationship between earnings management and insider trading, specifically investigating whether discretionary accruals are related to insider trading and valuation. We find strong evidence of insiders managing earnings downward when buying and managing earnings upward when selling. On the marginal basis, value (high book-to-market value) firms manage their earnings upward compared to growth (low book-to-market value) firms, consistent with a signaling hypothesis. However the opposite is true on the average basis, consistent with an opportunistic hypothesis.

Effects of Legal Environment and Managerial Ownership on Insider Trading Around Management Earnings Forecast Disclosures

Author : Youngsoon Susan Cheon
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Effects of Legal Environment and Managerial Ownership on Insider Trading Around Management Earnings Forecast Disclosures by : Youngsoon Susan Cheon

Download or read book Effects of Legal Environment and Managerial Ownership on Insider Trading Around Management Earnings Forecast Disclosures written by Youngsoon Susan Cheon and published by . This book was released on 2000 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates whether insiders who possess superior information to outsiders behave as if they time their trading around management forecast disclosures in order to earn extra profits. In the 1980s, Congress passed the Insider Trading Sanctions Act (ITSA) of 1984 and the Insider Trading and Securities Fraud Enforcement Act (ITSFA) of 1988 to prohibit illegal insider trading. Hence, this study further examines whether passage of the 1984 and 1988 Acts affect timing and pattern of insider trading around management forecast disclosures. Finally, the study investigates whether managerial ownership affects insider trading behavior around management forecast disclosures. This study finds evidence consistent with opportunistic i nsider trading. The 1984 ITSA appears to affect sell-side insider trading by reducing pre-disclosure purchase/sale transactions and self-serving sale trading volume. In contrast, pre-disclosure purchase trading increased after the 1988 Act. There is evidence that insider ownership affects the timing of insider trading. Insiders with low ownership are likely to buy after management forecast disclosures, while insiders with high ownership tend to buy before the forecast disclosures. Results, however, suggest that insiders with higher stakes do not necessarily trade more opportunistically than those with low ownership.

Insider Trading and Earnings Management

Author : Thomas Alan Issaevitch
Publisher :
ISBN 13 :
Total Pages : 230 pages
Book Rating : 4.:/5 (225 download)

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Book Synopsis Insider Trading and Earnings Management by : Thomas Alan Issaevitch

Download or read book Insider Trading and Earnings Management written by Thomas Alan Issaevitch and published by . This book was released on 2008 with total page 230 pages. Available in PDF, EPUB and Kindle. Book excerpt:

The Impact of Institutional Ownership and Board Structure on Earnings Management and Acquisition Performance of S & P 500 Index Firms Around Their Addition to the Index and an Experimental Approach to Buyer's Brokerage

Download The Impact of Institutional Ownership and Board Structure on Earnings Management and Acquisition Performance of S & P 500 Index Firms Around Their Addition to the Index and an Experimental Approach to Buyer's Brokerage PDF Online Free

Author : Muhammed Abdullah Sahin
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (711 download)

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Book Synopsis The Impact of Institutional Ownership and Board Structure on Earnings Management and Acquisition Performance of S & P 500 Index Firms Around Their Addition to the Index and an Experimental Approach to Buyer's Brokerage by : Muhammed Abdullah Sahin

Download or read book The Impact of Institutional Ownership and Board Structure on Earnings Management and Acquisition Performance of S & P 500 Index Firms Around Their Addition to the Index and an Experimental Approach to Buyer's Brokerage written by Muhammed Abdullah Sahin and published by . This book was released on 2010 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: