The Relation of Upward Earnings Management Incentives and Corporate Governance Mechanism to Asymmetric Expense Behavior

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2017
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Abstract
This study is aimed to investigate the relation of upward earnings management incentives and corporate governance system to asymmetric expense behavior. This research uses the relation of logarithm of SG&A ratio and logarithm of operating revenue ratio to measure the asymmetric expense behavior. The corporate governance system is measured by 7 variables including board size, the percentage of nonexecutive directors ownership, the percentage of institutional shareholder ownership, ownership concentration, the percentage of major shareholders ownership, the percentage of management ownership, auditor type and a combined proxy. Return on assets (ROA) rate and changes of net income to total assets ratio are used to measure upward earnings management incentives. The sample consists of 98 firms listed in Tehran Stock Exchange (TSE) during the period from 2005 to 2014 considering certain criteria. GLS- pooled method is run to analyze data. The results reveal that expense behaves asymmetric on average. Additionally, expense behaves symmetric in firms with upward earnings management incentives with an annual Lag in comparison with others. Corporate governance system has no significant relation to expense behavior on average. This system does not increase asymmetric behavior of expense in firms with upward earnings management incentives.
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esnaashari2017the Use this key to autocite in the manuscript while using SciMatic Manuscript Manager or Thesis Manager
Authors esnaashari, hamideh;javanmard, shabnam;
Journal پژوهش‌های تجربی حسابداری
Year 2017
DOI
DOI not found
URL
http://jera.alzahra.ac.ir/article_2940_2cf8635aa0160635aa2d80f25c4eb9ee.pdf
Keywords
Medicine Technology (General) Engineering (General). Civil engineering (General) environmental sciences business economics as a science management. industrial management energy industries. energy policy. fuel trade mathematics geology home economics accounting. bookkeeping

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