Earnings management and sale of assets / Nor'azam Mastuki and Nihlah Abdullah

The focus of this study is to examine whether firms used income from sale of assets as an instrument to manage earnings. Two aspect of earnings management are examined: earnings smoothing behavior and avoidance of debt covenant activities. A Sample had been taken from firms listed under industrial...

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Main Authors:	Mastuki, Nor'azam, Abdullah, Nihlah
Format:	Article
Language:	English
Published:	Institute of Research, Development and Commercialization (IRDC) 2006
Subjects:	Financial management. Business finance. Corporation finance Malaysia
Online Access:	http://ir.uitm.edu.my/id/eprint/12971/ http://ir.uitm.edu.my/id/eprint/12971/1/AJ_NOR%27AZAM%20MASTUKI%20SMRJ%2006%201.pdf

id	uitm-12971
recordtype	eprints
spelling	uitm-129712016-06-09T16:24:52Z http://ir.uitm.edu.my/id/eprint/12971/ Earnings management and sale of assets / Nor'azam Mastuki and Nihlah Abdullah Mastuki, Nor'azam Abdullah, Nihlah Financial management. Business finance. Corporation finance Malaysia The focus of this study is to examine whether firms used income from sale of assets as an instrument to manage earnings. Two aspect of earnings management are examined: earnings smoothing behavior and avoidance of debt covenant activities. A Sample had been taken from firms listed under industrial and consumer product at the main board of Bursa Malaysia from 2000 to 2003. Similar with findings obtained in an environment where current cost are applied in asset reporting, we found that incentive for earnings management is asymmetric.firms with poor economic performances (negative earnings change) have greater incentive to smooth earnings that firm exhibiting good economic performance (positive earning change). This study had also examined whether the asymmetric results holds true for firms selling asset with high impact on net income in comparison with firms selling asset with low impact on net income. an area which had not been explored by previous studies. And within this context we also found asymmetric results. Firms reporting high impact of income from asset sale in relation to net income had shown significant evidence ofearnings smoothing patterns. No evidence is found to associate earnings smoothing activities with firms reporting low impact of income from asset sale in relation to net income. However this research had failed to find evidence to associate income from asset sale with debt-equity hypothesis in all sub samples. Institute of Research, Development and Commercialization (IRDC) 2006 Article PeerReviewed text en http://ir.uitm.edu.my/id/eprint/12971/1/AJ_NOR%27AZAM%20MASTUKI%20SMRJ%2006%201.pdf Mastuki, Nor'azam and Abdullah, Nihlah (2006) Earnings management and sale of assets / Nor'azam Mastuki and Nihlah Abdullah. Social and Management Research Journal, 3 (1). pp. 85-97. ISSN 1675-7017
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Teknologi MARA
building	UiTM Institutional Repository
collection	Online Access
language	English
topic	Financial management. Business finance. Corporation finance Malaysia
spellingShingle	Financial management. Business finance. Corporation finance Malaysia Mastuki, Nor'azam Abdullah, Nihlah Earnings management and sale of assets / Nor'azam Mastuki and Nihlah Abdullah
description	The focus of this study is to examine whether firms used income from sale of assets as an instrument to manage earnings. Two aspect of earnings management are examined: earnings smoothing behavior and avoidance of debt covenant activities. A Sample had been taken from firms listed under industrial and consumer product at the main board of Bursa Malaysia from 2000 to 2003. Similar with findings obtained in an environment where current cost are applied in asset reporting, we found that incentive for earnings management is asymmetric.firms with poor economic performances (negative earnings change) have greater incentive to smooth earnings that firm exhibiting good economic performance (positive earning change). This study had also examined whether the asymmetric results holds true for firms selling asset with high impact on net income in comparison with firms selling asset with low impact on net income. an area which had not been explored by previous studies. And within this context we also found asymmetric results. Firms reporting high impact of income from asset sale in relation to net income had shown significant evidence ofearnings smoothing patterns. No evidence is found to associate earnings smoothing activities with firms reporting low impact of income from asset sale in relation to net income. However this research had failed to find evidence to associate income from asset sale with debt-equity hypothesis in all sub samples.
format	Article
author	Mastuki, Nor'azam Abdullah, Nihlah
author_facet	Mastuki, Nor'azam Abdullah, Nihlah
author_sort	Mastuki, Nor'azam
title	Earnings management and sale of assets / Nor'azam Mastuki and Nihlah Abdullah
title_short	Earnings management and sale of assets / Nor'azam Mastuki and Nihlah Abdullah
title_full	Earnings management and sale of assets / Nor'azam Mastuki and Nihlah Abdullah
title_fullStr	Earnings management and sale of assets / Nor'azam Mastuki and Nihlah Abdullah
title_full_unstemmed	Earnings management and sale of assets / Nor'azam Mastuki and Nihlah Abdullah
title_sort	earnings management and sale of assets / nor'azam mastuki and nihlah abdullah
publisher	Institute of Research, Development and Commercialization (IRDC)
publishDate	2006
url	http://ir.uitm.edu.my/id/eprint/12971/ http://ir.uitm.edu.my/id/eprint/12971/1/AJ_NOR%27AZAM%20MASTUKI%20SMRJ%2006%201.pdf
first_indexed	2023-09-18T22:49:39Z
last_indexed	2023-09-18T22:49:39Z
_version_	1777417458024448000

Earnings management and sale of assets / Nor'azam Mastuki and Nihlah Abdullah

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