AJBA91 Editors Note (original) (raw)

It is our pleasure to present the first issue of Volume 9 of the Asian Journal of Business and Accounting (AJBA). In this issue of AJBA, we have selected six papers for publication; all but one were the results of funded research. Four of the papers were authored by international scholars from emerging countries in Asia namely Thailand, Indonesia and Bangladesh, and two papers were authored by researchers from Malaysia. The first paper by Thanatawee examines the impact of open market share repurchases on stock liquidity of listed companies in Thailand over a period of 13 years, from 2002 to 2014. His research reveals that repurchasing shares can help increase stock liquidity but aggressive repurchasing over a short period of time has the contrary effect. This is consistent with the information asymmetry hypothesis which posits that managers are better informed thus, could use inside information to trade against outsiders, a governance issue. In the second paper, Wong and Hooy investigate the impact of elections in Indonesia, Malaysia and Thailand on stock market returns of government-owned banks from 2000 to 2013. Using event study methodology to capture the effect of short-horizon, the findings indicate that after elections, stock return rises more for government-owned banks as compared to non-government owned banks. This suggests that government-owned banks are reliant on their owners. Interestingly, this paper finds that the significance of government ownership on stock return, immediately after election, is highest in Malaysia followed by Thailand and Indonesia. The findings contribute to the extant literature on the political connections of financial firms where undertaken research is limited. The theme of governance is continued by papers written by Ahmed and Naima; Togok, Isa, and Zainuddin; and Utami and Nahartyo. One of the aims of good governance is to mitigate fraudulent financial reporting and opportunistic earnings management. In Ahmed and Naima, the Beneish Model (1999) was employed to identify the signs of earnings manipulation among firms in Bangladesh. Their findings suggest that the dominating indicative ratios relate to inflated revenues, capitalising expenses and overstating intangibles.

Monitoring Financial Risk and Earnings Manipulation Across Malaysia, Thailand and Indonesia

Asia-Pacific Management Accounting Journal

This paper discusses the significance of mean difference in free cash flow, leverage, as well financial distress between Malaysia, Thailand, and Indonesia. It involved 582 samples from Bursa Malaysia, Stock Exchange of Thailand, and Indonesia Stock Exchange on an annual basis commencing from 2015 to 2017. The purpose of this study was to determine whether the significance of variables towards earnings manipulations (by proxy of discretionary accruals) within the countries can be used to propose a new regulation that focuses more towards reducing the earning manipulation within the firm, as results might be helpful for firms in the near future. Moreover, the study aimed to identify which firm within these three countries wholly manipulated earnings more than the other. The significance difference of the of earning manipulation for the 3 countries was investigated. The descriptive statistics tells that Indonesia had the highest debt compared to two other countries. Results from one-wa...

NEXUS BETWEEN POSSIBILITY OF FRAUDULENT FINANCIAL REPORTING AND CORPORATE GOVERNANCE: EVIDENCE FROM BANGLADESH

2023

This paper intends to test the nexus between the possibility of fraudulent financial reporting and the corporate governance in Bangladesh. The content analysis of annual reports has been performed for 125 Bangladeshi listed manufacturing companies. In this study, we apply more than one fraud indicator models such as Altman Z-score and Beneish M-score models to determine more accurately the chance of fraudulent financial reporting. The chance of fraudulent financial reporting is determined based on whether either one or both of Altman Z-score and Beneish Mscore models show red flags of potential fraud. This study found that board members with finance or accounting backgrounds are less likely to practice in misleading financial reporting since they may have the knowledge essential to understand fraudulent financial reporting strategies. This result implies that qualified directors may supervise financial reporting practices better, hence improving the quality of financial reports. Alternatively, some other components of corporate governance, such as board size, board independence, director ownership, gender diversity, and auditors' independence, have insignificant impacts on fraudulent financial reporting practices. This outcome indicates that these Bangladeshi corporate governance components may not be as strong in improving financial reporting credibility. In the context of Bangladesh, this is the first empirical study with management and policy implications. To the best of the writers' knowledge, no article yet has been worked on the possibility of fraudulent financial reporting which calculated by multiple models and its relationship with the corporate governance in the context of Bangladesh.

The Role of Corporate Governance on the Relationship Between IFRS Adoption and Earnings Management: Evidence From Bangladesh

Sciedu Press, 2020

Purpose: This study investigates the relationship between IFRS adoption and earnings management (EM) i.e. discretionary accruals (DA) and real earnings management (REM) in developing economy like Bangladesh. Moreover, the study examine the relationship between corporate governance (CG) strength and EM as well as moderating role of CG strength on the relationship between IFRS adoption and EM. Design/methodology/approach: The study employs 94 firms listed in Dhaka Stock Exchange (DSE) for 6 years i.e. 564 firm years observation, over two time period as pre (2004-06) and post (2013/14-15/16) adoption of IFRS. Underpinning theory of the study is agency theory which explained the relationship among variables. Based on earlier literature a CG index is developed to measure the strength of CG. The study uses random effect GLS with robust regression in a balanced panel data. Findings: The results show that IFRS and CGI both have significant negative relationship with EM. Moreover, it is documented that the CG strength significantly moderates the relationship between IFRS and REM. It implies that the presence of good CG may help to attain the objectives of IFRS adoption Originality/value: To the best of the author's knowledge, this is one of the first empirical attempts at providing evidence about the role of CG on the relationship between IFRS adoption and EM in Bangladesh. The findings of this study can be beneficial for the member of the regulatory bodies and researchers to formulate new policy and enhance corporate governance practices in Bangladeshi companies as well as develop a better framework for all stakeholders involved in financial reporting. Future studies may also investigate the interacting effect of corporate governance strength on other related variables which may influence the level of earnings management.

Loading...

Loading Preview

Sorry, preview is currently unavailable. You can download the paper by clicking the button above.