Earnings Management, Auditing, Transparency and Accountability in Financial Reporting

Auditing is the unbiased examination of books of accounts of an entity to detect and prevent errors and fraud Where as corporate transparency is the relevant, timely and accurate information which is readily accessible. There is a linkage between Auditing and corporate transparency.

The paper aims to extend the research on the financial reporting quality (FRQ) of small and medium-sized enterprises (SMEs) by exploring its determinants through an empirical analysis of financial data from a large sample of Italian SMEs. Although
recent studies have shown the importance of FRQ in reducing SMEs’ cost of debt, and although a recent report by the Financial Reporting Council has found that the quality of SMEs’ reporting can affect investment, rating and lending decisions, little is known
about the determinants of FRQ in this peculiar context. This study found that the presence of a Board of Statutory Auditors, as well as a high level of leverage, can improve the FRQ of SMEs. In the results, the paper provides evidence of the factors determining the FRQ of SMEs and advances the knowledge on the role of financial information on SMEs by significantly contributing to the limited research in this field.
The paper concludes with managerial and economic implications for the improvement of the financial reporting quality of SMEs.

This paper empirically examines the post-merger performance of a sample of 1,320 European mergers and acquisitions deals. Specifically, we investigate the impact of pre-merger earnings management of acquirers on both the short-term and long-term post-merger performance, for M&A deals completed between 2003-2012, considering both the form of payment and the target firm’s listing status. The findings suggest that acquirers report higher abnormal accruals before those deals where they pay with their stock and the target firms are private. The reported evidence suggests that, as a consequence, investors correct for these efforts in the long-term post-merger period – usually within the first 12 months. Moreover, acquirers are likely to experience positive abnormal returns in case of bidding for private targets, whereas negative abnormal returns are documented in case of a publicly traded target, respectively.

In the 2008 Afrobarometer survey1 for Tanzania, citizens were asked how well local councils allowed their participation in local-level decision-making. The result was a 50/50 split between those who thought that councils did not allow participation and those who thought they did. Yet when asked how much an ordinary person can do to improve how local government is run in their communities, 71% said either very little or nothing. While the largest proportion of citizens interviewed (about 40 %) felt that voters are the ones with the primary responsibility for making sure that their elected leaders did their jobs, most respondents (64%) felt that it was difficult to have their voices heard in between elections.
This case study explores the extent to which these findings are consistent with the preliminary lessons emerging from the learning partnership between Policy Forum and the PSAM. The case study also demonstrates that it is possible under certain conditions to strengthen the voice of citizens and their representative groups in demanding and obtaining accountability from government.

This study examines the impact of risk management committee on real earnings management through sales manipulation of listed companies in Nigeria. The analysis is based on a sample of 80 listed non-financial firms for the period of five years (2012-2016), making up 400 firm-year observation. The data was extracted from the annual report of the sample firms and Thompson Reuters database. Panel corrected standard error regression (PCSE) was employed. The results show that risk management committee (RMC) and independence directors reduce the management desire to manipulate the reported earnings. The study informs the regulators on the needs for firms to set up an independent RMC to restrain management from manipulating the real earnings activities through sales.

Theoretical research suggests that large auditors have more incentive to issue accurate reports compared to small auditors (DeAngelo. 1981; Dye, 1993). Controlling for the client characteristics of large and small auditors, this paper shows that large auditors issue reports that are more accurate and more informative signals of financial distress. These findings are consistent with the theoretical prediction of a positive relationship between auditor size and auditor accuracy.

There are always conflicts of interest between managers (agents) and owners (leaders), but not necessarily the degree of disagreement. This is due to a conflict of interest or a division of responsibility. The purpose of this research is to look at the effects of earnings management and ownership structure on business value. The public firms included for this research were listed on the Amman Stock Exchange between 2015 and 2019. The purposive sampling strategy is used in this research to examine the sample, providing seven businesses as the test sample. In the regression analysis, multiple regression and descriptive statistics were applied. According to the conclusions of this research, earning management, managerial ownership, and institutional ownership have minimal effect on business value. Aside from that, the findings suggest that family ownership has a significant favorable influence on business worth. To maximize the firm's valuation, it is recommended that these firms strictly adhere to the CG mechanism as a requirement. The function of CG as an independent or moderating variable, on the other hand, is still debatable.

In this paper, we present the results of the first effort to consolidate information on infrastructure projects in the Amazon region financed by BNDES – National Bank for Economic and Social Development. A political-financial institution in the last two decades shifted from the status of National Development Bank, working exclusively in Brazil, to take its place among the major development banks with international operations. The experience we had in search of reliable official information of projects financed by the BNDES, especially those for financing activities abroad, leads us to conclude that persistent barriers to public access to such data. This conflicts with the current government’s discourse in the country in favor of the right of society access to public information. For the presentation of the data was decided to divide the Amazon region into three subregions, namely: 1) Brazil, 2) Andean Amazon, and 3) Arco Norte.

This paper proposes a conceptual framework to investigate the role of family ownership for mitigating earnings management (accrual & real). Family ownership is among the corporate governance primary mechanisms that have been a focus of many researchers and scholars. The present study argues that firms with family ownership are less likely to allow earnings management because they have typically invested a lot of their private fortune in the firm and families are more concerned about the survival of the firm and its reputation; thus, they have a strong motivation to monitor management very well. Despite that, there is a lack of prior studies that examine these relationships in developing countries. So, the main objective of this study was to bridge this gap and try to enrich the existing literature.

As part of the continuous effort to stem the tide of bank distress in the Nigerian Banking industry, this paper examines the relationship between real GDP and Non-performing loans in Nigeria during the period 1995-2009. Based on the Pearson Product-Moment Correlation Coefficient, the time series analysis revealed that there is a significant and positive relationship between real GDP and Non-performing loans in the Nigerian banking industry. This is contrary to the findings in previous studies. It is therefore recommended that government should implement policies that will provide the enabling environment for desired improvement in real GDP, and ensure through its regulatory agencies that due process and principles of good lending are strictly adhered to by banks and other financial institutions.

The study attempted to explore the role of discretionary accrual to conceal the actual earnings as a
part of misapplication of flexible area in financial estimate in Indian BSE listed companies. As accruals
have always provided a common opportunity to deceive financial statements users where the effect
causes the financial statements not to be presented, in all material respects, and so along with the H&C
(2002) model for total accruals, the most admired DeAngelo (1986) model has been applied for
calculating discretionary accruals as part of the treatment for potential earnings management practices
for the study. With the sample of BSE listed (industry wise) top 50 companies in India from 2010-2014,
an attempt is made to investigate material misstatements issue with respect to industry classification on
the basis of service and non-service sectors. It is found that the service sector industries are involve in
income decreasing earnings management practices while non-service sector industries are in reverse
practice. Apart from negative correlation between assets size of the firm and discretionary accruals. It
is found that the entities of all sizes are susceptible with aberrant pattern and despite the fact that the
large firms are engage in income decreasing earnings management practices, on the contrary the small
firms are more likely involve in income increasing practices in financial reporting of service or non-service
sector under which it is operating.

This article, by applying five Islamic concepts (Fitrah, Akhlaq, Niyyah, Ijtihad and
Maslahah), seeks for a solution of the problem of earnings management conducted by the
managers. By analyzing several definitions of earnings management it can be found that
managers’ wrong/unethical intention is the main cause behind this problem. The article
suggests that if the intention (Niyyah) of the managers can be purified through ethical
training (Akhlaq), then it can be expected that they will apply their highest possible effort
and knowledge (Ijtihad) in order to ensure the interests of the stakeholders (Maslahah).
This can be a possible solution for the problem of earnings management.

Tax evasion has always been practiced among tax payers in Bangladesh. But the actual reason for this practice has always remained a mystery. This research has taken the initiative to find a possible reason for such behavior
among  current  tax  payers  in  the  country.  A  structured  questionnaire  was used among 300 tax payers to collect primary information which was later broken down through the usage of SPSS to reach at a justified end. Few hypotheses were generated and tested using the primary data and in most cases the null hypothesis were accepted. A model was developed, including a  dependent  variable  and  eleven  independent  variables  (categorized  as demographic  and  intellectual).  The  model  was  found  significant  for  this
research by conducting a regression analysis. Finally a correlation analysis was  done  between  dependent  and  selected  independent  variables  to generate a statistical conclusion of this paper. The core aim of this inquiry
was to share some insight about the tax evasion tendency in Bangladesh and to motivate interested partied in taking appropriate action.

Abstract
It is argued that large shareholders have enormous influence over their companies as their ability to monitor the executives can
mitigate the agency problems. This paper examines how large shareholders are related to company performance after
distinguishing domestic large shareholders from the foreign large shareholders. Using a panel of 58 companies listed on the
Nigerian Stock Exchange with 222 company-year observations from 2009 to 2012, firm-level fixed effects regression was used
for analysis. We find evidence that domestic large shareholders are associated with better company performance while foreign
large shareholders show a concave relationship with company performance with inflection point at 31.88%. The empirical result
also shows that the joint presence of the both domestic large shareholders and foreign large shareholders in companies seems
to make them pursue overall wealth maximization objective of the company. The result is consistent with the contention that
concentrated ownership remains an effective corporate governance mechanism in an environment with weak investor
protection rights. The study contributes to the corporate governance literature of the substitution effect of large shareholders
for effective corporate governance practice.
Keywords: Large Shareholders, Corporate Governance, Company Performance, Nigeria

The aim of this study is to provide a complete description of the related literature associated to the relationship between ownership structures, namely; family, managerial and foreign ownership; and Real and Accrual Earning Management. As has much research over the past decades preceding this study, this research explores how ownership structure plays an essential function in forming the corporate governance system of a company. The existing literature on ownership structure indicates that there is a lack of research on the three forms of ownership nominated above and their subsequent impact on the two kinds of earnings management in developing countries. Thus, this research focuses on the three specific and less researched ownership structures to fill the identified gap as well as to attempt to add to the literature in this field.

Akademi veya üniversite, toplumun temel dinamiklerini oluşturan ve şekillendiren en önemli yapıdır. Akademi, toplumun eğitiminden ahlakına, iktisadi gelişmişliğinden aile yapısına kadar bütün unsurlarını etkilemektedir. Bunun yanı sıra, Modern Dünya'da ulusların saygınlıkları ekonomik, teknolojik ve bilimsel üretimde aldıkları rollerle ölçülür hale gelmiştir. Türkiye Akademisi, her geçen gün artmakta olan öğrenci ve alanlarında doktoralı yetkin uzmanlarıyla ülkemizin lokomotifi vazifesi görmektedir. Bilim ve teknikteki gelişmeleri takip etmenin yanı sıra çağdaş teknolojiyi bizatihi üretmek noktasında Türkiye Üniversiteleri ve akademisi gereken özveriyi göstererek durmaksızın çalışmaktadır. Sendikal faaliyetlerin yoğunluğu ile ülkelerin gelişmişlik düzeyleri arasındaki ilişki her zaman için doğru orantılı olmuştur. Bunun yanı sıra Türkiye'de akademisyenlerin tamamına hitap eden bir sendikanın eksikliği Türkiye akademisi ve toplumu tarafından yoğun bir şekilde hissedilmektedir. Bu doğrultuda üniversiteler ve akademisyenlerin sorunlarına çözüm arayışlarında bir paydaş olma iddiasında bulunan AKA-SEN, Ankara Valiliğine verilen dilekçe ve tüzük ile kurularak faaliyetlerine başlamıştır. AKA-SEN, sendika ruhunun bir gereği olarak siyasi partilerden bağımsız olarak faaliyet göstermektedir. AKA-SEN, herhangi bir konfederasyona bağlı olmayıp; herhangi bir siyasi partinin uzantısı şeklinde hareket etmeyecek; din, dil, ırk veya cinsiyet gibi her hangi farklılık gözetmeksizin Türkiye Cumhuriyeti sınırları içerisinde görev yapan akademisyenlerin temsilcisi olacaktır. Bu doğrultuda farklı üniversitelerde çalışan, farklı siyasi görüşleri olan meslektaşlarımızı AKA-SEN çatısı altında birleşmeye davet ediyoruz.  Daha iyi bir akademi için AKA-SEN  Akademinin yeni ve güçlü sesi için AKA-SEN  Akademinin onuru ve ahlakı için AKA-SEN  Mobbing ve intihale son vermek için AKA-SEN

Abstract
The importance of earnings response coefficient (ERC) topic in our business world today arises mainly from the need to enhance the firm’s stakeholders’ confidence in the accounting information announcements, especially the equity investors, enabling them to make the appropriate stock decisions. This paper reviews the ERC literature as regards the evolution and development of the relevant theories, perspectives, and models used with respect to ERC since 1968 when the earnings-to-returns relationship was first documented. It also reviews the application of the ERC perspective showing the empirical findings as well as the related research methodologies applied since that date until now. The review includes our relevant explicit and implied critiques. In addition to the above enhancement of the stakeholders’ confidence in the accounting information, this review paper will be useful to the financial accounting standards setters and will enrich the literature on earnings-to-returns relationship. 
Keywords: ERC, Earnings, Stock Returns, Stock Price

Tujuan dari penelitian ini adalah untuk menguji faktor-faktor yang mempengaruhi praktik perataan laba pada industri manufaktur yang terdaftar di Bursa Efek Indonesia dan pada perusahaan yang terdaftar di indeks LQ45.
Faktor – faktor yang akan diuji adalah ukuran perusahaan, profitabilitas, risiko keuangan, dan struktur kepemilikan publik.
Jumlah sampel yang akan diteliti adalah 74 perusahaan, yaitu 65 perusahaan yang terdapat pada industri manufaktur dan 9 perusahaan yang terdapat pada indeks LQ45. Teknik penarikan sampel ini adalah dengan menggunakan metode purposive sampling. Kriteria penelitian ini adalah perusahaan yang terdaftar pada Bursa Efek Indonesia yaitu dari tahun tahun 2006 sampai dengan tahun 2008, perusahaan yang laporan keuangannya tidak pernah melaporkan rugi, perusahaan yang memiliki data yang lengkap, perusahaan yang menggunakan uang rupiah, perusahaan yang tidak melakukan akuisisi atau merger, dan perusahaan yang konsisten dalam indeks LQ45 selama periode pengamatan. Untuk mengidentifikasi perusahaan yang melakukan praktik perataan laba dengan menggunakan Indeks Eckel. Hipotesis akan diuji dengan menggunakan binary logistic regression.
Hasil penelitian ini menunjukkan bahwa ukuran perusahaan memiliki pengaruh yang signifikan terhadap praktik perataan laba, tetapi profitabilitas, risiko keuangan, dan struktur kepemilikan publik tidak memiliki pengaruh terhadap praktik perataan laba.

En el presente trabajo se analiza la incidencia de algunos aspectos de la función de auditoría sobre la calidad de la información contable suministrada por la empresa. Partiendo de una muestra de 137 empresas que cotizaron en las Bolsas españolas durante los años 2002 y 2003, nuestro estudio se puede estructurar en dos vertientes: las características de la comisión de auditoría y la relación de la empresa con los auditores externos. Nuestros resultados evidencian una estrecha y beneficiosa relación entre la fiabilidad de la información contable y tanto el tamaño como la independencia de la comisión de auditoría. Asimismo, se observa que el prestigio de la empresa auditora mejora la calidad de los estados financieros y que existe una combinación de efecto experiencia y efecto connivencia en relación con la duración del contrato con el auditor.

This paper analyzes the impact of auditing on the quality of accounting information of firms. Based on a sample of 137 firms listed in Spanish capital markets in 2002 and 2003, our study has two different scopes: the characteristics of the auditing committee and the relation of the firm with auditors. Our results show a close relation between the quality of accounting information and both the size and the independence of the auditing committee. In addition, we find that the reputation of the external auditor improves the quality of financial statement and that there is a mixed experience- connivance effect related to the duration of the contract with the auditor.