- Log In/Sign Up
- P-ISSN1738-3110
- E-ISSN2093-7717
- SCOPUS, ESCI
ISSN : 1738-3110
A Research on the Relationship between Accrual-based Earnings Management and Real Earnings Management in the Retail Industry
KIM, Taejoong
Abstract
Purpose - In this paper, we examine the effect of accrual earnings management and real earnings management on the corporate value of retail corporations. Research design, data, and Methodology - The sample cover firms whose settlement is December among retail companies listed on the Korea Stock Exchange's securities market and KOSDAQ market from 2001 to 2016. Of these, the targets were companies with operating profit and equity capital of zero or higher and with sales data. The secondary data was collected through KIS-VALUE data base. The Jones model and the modified Jones model were used for the calculating the accrual-based earnings management and the real earnings management. Result - According to the empirical results, the relationship between accrual earnings management, real earnings management and firm value is positively significant in the retail industry as in manufacturing industry. These results are also significant when controlling the size, profitability, investment, debt ratio, dividend, and growth potential of a company. Conclusions - The characteristics of the distribution business can be identified and the influence of the various kinds of earnings management, which is being researched around the manufacturing industry, can be studied in the distribution industry to give practical implications to investors.
- keywords
- Jones Model, Modified Jones Model, Accrual-based Earnings Management, Real Earnings Management, Firm Value
Reference
Bae, H. S., & Kim, K. H. (2013). The Effects of Real Earnings Management in Corporate Life Cycle Stage on Managerial Performance and Stock Return. Accounting Information Review, 31(1), 241-266.
Baygi, S., & Javadi, P. (2015), Disclosure Quality and Economic Value Added, The International Journal of Industrial Distribution & Business, 6(2), 5-11.
Choi, S. J., & Kim, Y. G. (2013). Research Articles: Market Mispricing on Real Earnings Management and Foreign Investors. Korean Accounting Review, 38(2), 113-144
Dang, H., N., & Tran, D., M. (2019), Relationship between Accrual Anomaly and Stock Return: The Case of Vietnam. The Journal of Asian Finance, Economics and Business, 6(4), 19-26.
Kang, S. A., & Chun, S. B. (2010). Characteristics of Firms Engaged in Real Activity Based Earnings Management: Evidence from Korea. Korean accounting review, 35(2), 35-70.
Kim, B. H. (2015). Empirical Analyses on the Trade-Off between Real Activity Manipulation and Accrual Earnings Manipulation in Korean Listed Firms. International Area Studies Review, 19(1), 31-52
Kim, J. K., Yu, S. M., & Kim, H. J. (2012). The Impact of Real Earnings Management on Cost of Capital. International Accounting Review, 44, 23-48.
Kim, S. H., & Lee, A. Y. (2012). The Effect of Disclosure Quality on the Analyst Following. Korean Corporate Management Review, 19(6), 59-74.
Kim Y. H. (2009). Earnings Management and Value Relevance of Accounting Information of KSE and KOSDAQ Firms. Accounting Information Review, 27(2), 255-272.
Kim, Y. H. (2014). The Effect of CSR on Earnings Management and Firm Value. Tax Accounting Research. 40, 147-163
Muhammad, H., Rehman, A., U., & Wagas, M. (2016), The Effect of Corporate Governance Practices on Firm Performance: Evidence from Pakistan. The East Asian Journal of Business Management, 6(1), 5-12.
Nam, H., J. (2019), The Effect of Earnings Quality on Financial Analysts’ Dividend Forecast Accuracy: Evidence from Korea. The Journal of Asian Finance, Economics and Business, 6(4), 91-98.
Paek, W. (2000). Performance Evaluation of Discretionary Accruals Estimates as a Means of Earnings Management: Remodified Jones Model. Korean accounting review, 25(3), 29-56.
Park, A. Y. (2013). The Effect of Corporate Governance Ratings on Real Earnings Management. Korea Journal of Business Administration. 26(5), 1289-1315.
Park, J. I., Park, K. H., & Park, C. W. (2012). The Effect of Accrual-based and Real Earnings Management on Corporation Credit Rating -Focused on Public and Private Firms. Journal of Taxation and Accounting. 13(1), 65-98.
Park, S. H., Park, K. J., & Shin, H. H. (2012). An Empirical Study of the Effect of Firms` Uncertainty on the Association between Management Earnings Forecast Errors and Accruals. Accounting Information Review, 30(4), 147-171.
Park, Y. G. (2012). Accrual Based and Real Earnings Management in Korean Firms: Substitutionary or Complementary Relation. Korean Corporate Management Review, 46, 43-59.
Rahman, M., & Hasan, M. (2019), Determinants of Quality of Financial Information: Empirical Evidence from Cement Sector of Bangladesh. The East Asian Journal of Business Management, 9(1), 13-20.
Rahman, M., Meah, R., & Chaudhory, N., U. (2019), The Impact of Audit Characteristics on Firm Performance: An Empirical Study from an Emerging Economy. The Journal of Asian Finance, Economics and Business, 6(1), 59-69.
Ruonan, Z., & Hong, Y. (2019), Corporate Social Responsibility Disclosure, Financing Constraints and Investment-Cash Flow Sensitivity. The East Asian Journal of Business Management, 9(1), 21-28.
Ryu, H., Y. (2019), The Impact of Disclosure Quality on Crash Risk: Focusing on Unfaithful Disclosure Firms. The International Journal of Industrial Distribution & Business, 10(6), 51-58.
Ryu, S. Y., & Yook, Y. B. (2013). The Value Relevance of Accounting Information in the Distribution Industry in Accordance with Size of the Firms` Intangible Assets. Korea Distribution Industry Management, 16(4), 5-15.
Shirzad, A., Mohammadi, S., & Haghighi, R., (2015). Effect of Financial Performance on Earnings Management in the Drug Distribution Industry. Journal of Industrial Distribution & Business, 6(4), 23-26.
- Downloaded
- Viewed
- 0KCI Citations
- 0WOS Citations