A DIAGNOSTIC FOR EARNINGS MANAGEMENT USING CHANGES IN ASSET TURNOVER AND PROFIT MARGIN: EVIDENCE FROM PALESTINE EXCHANGE

Israa AL-MADHOUN; Hisham Kamel MADİ; Mohammed Marwan ALASHİ

doi:https://doi.org/10.17261/Pressacademia.2021.1388

Makale detayları

A DIAGNOSTIC FOR EARNINGS MANAGEMENT USING CHANGES IN ASSET TURNOVER AND PROFIT MARGIN: EVIDENCE FROM PALESTINE EXCHANGE

Yazarlar:

Israa AL-MADHOUN | Hisham Kamel MADİ | Mohammed Marwan ALASHİ

Yayıncı:

PressAcademia

Ana Başlıklar:

Yönetim | Genel yönetim

Dergi:

Journal of Economics Finance and Accounting 2021 Vol.8 Issue 1, pp.67-82

Belge Tipi:

Makale

Yayın Tarihi:

3/2021

Belge Dili:

İngilizce

Document ID (Org No.):

2000738438

Sıklık:

Üç Aylık

eISSN:

2148-6697

DOI:

https://doi.org/10.17261/Pressacademia.2021.1388

Özet:

 

Purpose - This paper aims to evaluate whether the earnings management diagnostic using changes in asset turnover and profit margin as proposed by Jansen et al., (2012) is informative in identifying earnings management
Methodology - Two tests were employed: firstly, the association between the diagnostic and discretionary accruals using Kothari et al., (2005) model, was tested by using Pearson correlation and contingency tables. Secondly, by using future profitability reversals as an indicator of earnings management, the investigation of whether the diagnostic has incremental information in identifying earnings management as compared to Kothari et al., (2005) model was performed using multivariate regression analysis. Data was collected for the period from 2006 to 2017 and comprises a total of (3,108) firm-year observations from the Palestinian stock exchange. 
Findings- The results indicate that the diagnostic proposed by Jansen et al., (2012) is a useful indicator for earnings management, as well as this diagnostic, provides higher information content in identifying earnings management than the discretionary accruals model i.e. Kothari et al., (2005) model.
Conclusion- This study contributes to the limited earnings management literature in emerging economies generally, and in the Palestinian context particularly.  The results of the study benefit financial statement users to have diagnostics for earnings management that are informative.

Makale detayları

A DIAGNOSTIC FOR EARNINGS MANAGEMENT USING CHANGES IN ASSET TURNOVER AND PROFIT MARGIN: EVIDENCE FROM PALESTINE EXCHANGE

Yazarlar: Israa AL-MADHOUN | Hisham Kamel MADİ | Mohammed Marwan ALASHİ

Yayıncı: PressAcademia

Ana Başlıklar: Yönetim | Genel yönetim

Dergi: Journal of Economics Finance and Accounting 2021 Vol.8 Issue 1, pp.67-82

Belge Tipi: Makale

Yayın Tarihi: 3/2021

Belge Dili: İngilizce

Document ID (Org No.): 2000738438

Sıklık: Üç Aylık

eISSN: 2148-6697

DOI: https://doi.org/10.17261/Pressacademia.2021.1388

Sayı

Yazarlar:

Israa AL-MADHOUN | Hisham Kamel MADİ | Mohammed Marwan ALASHİ

Yayıncı:

PressAcademia

Ana Başlıklar:

Yönetim | Genel yönetim

Dergi:

Journal of Economics Finance and Accounting 2021 Vol.8 Issue 1, pp.67-82

Belge Tipi:

Makale

Yayın Tarihi:

3/2021

Belge Dili:

İngilizce

Document ID (Org No.):

2000738438

Sıklık:

Üç Aylık

eISSN:

2148-6697

DOI:

https://doi.org/10.17261/Pressacademia.2021.1388