Influence of Company Characteristics on Earnings Management in Group Affiliated and Standalone Firms: Evidence from India

Q2 Business, Management and Accounting Business Perspectives and Research Pub Date : 2023-04-05 DOI:10.1177/22785337221148543

Isha, Deepa Mangala

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Abstract

The study investigates the influence of company-specific characteristics, such as firm age, firm size, performance, leverage, capital intensity ratio, and assets growth, on earnings management. The study also examines the influence of such characteristics on earnings management in group-affiliated and standalone firms. The final sample consists of 248 companies listed on the Bombay Stock Exchange. The research takes place from 2012–2013 to 2018–2019. Signed discretionary accruals and signed discretionary current accruals are used as proxies for measuring earnings management. The findings show that the firm’s age, performance, and leverage are all positively associated with signed discretionary accruals. However, the capital intensity ratio has a negative relationship. Further, group firms are less likely to indulge in earnings management practices as compared with standalone firms. Also, the firm age and performance have positive relation, and capital intensity ratio has negative relation with signed discretionary accruals for group firms. In the case of standalone firms, firm size, performance, and leverage have a positive association whereas capital intensity has a negative association. The results of the present study give insight to financial analysts, regulators, investment analysts, credit rating agencies, etc., to keep an eye on manipulative reporting practices done by companies of different characteristics and ownership attribute.

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公司特征对集团附属公司和独立公司盈余管理的影响：来自印度的证据

本研究调查了公司年龄、公司规模、绩效、杠杆率、资本密集率和资产增长等公司特定特征对盈余管理的影响。本研究还考察了这些特征对集团附属公司和独立公司盈余管理的影响。最后的样本包括在孟买证券交易所上市的248家公司。研究时间为2012-2013年至2018-2019年。已签字的可自由支配应计项目和已签字的自由支配当期应计项目被用作衡量盈余管理的指标。研究结果表明，公司的年龄、业绩和杠杆率都与签署的可自由支配应计项目呈正相关。但是，资本密集度与资本密集度呈负相关。此外，与独立公司相比，集团公司不太可能沉迷于盈余管理实践。此外，集团企业的企业年龄与绩效呈正相关，资本密集率与签署的可自由支配应计项目呈负相关。在独立企业的情况下，企业规模、绩效和杠杆率呈正相关，而资本强度呈负相关。本研究的结果为金融分析师、监管机构、投资分析师、信用评级机构等提供了见解，以关注不同特征和所有权属性的公司的操纵性报告行为。

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Business Perspectives and Research Business, Management and Accounting-Business and International Management

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5.00

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0.00%

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期刊介绍： Business Perspectives and Research (BPR) aims to publish conceptual, empirical and applied research. The empirical research published in BPR focuses on testing, extending and building management theory. The goal is to expand and enhance the understanding of business and management through empirical investigation and theoretical analysis. BPR is also a platform for insightful and theoretically strong conceptual and review papers which would contribute to the body of knowledge. BPR seeks to advance the understanding of for-profit and not-for-profit organizations through empirical and conceptual work. It also publishes critical review of newly released books under Book Review section. The aim is to popularize and encourage discussion on ideas expressed in newly released books connected to management and allied disciplines. BPR also periodically publishes management cases grounded in theory, and communications in the form of research notes or comments from researchers and practitioners on published papers for critiquing and/or extending thinking on the area under consideration. The overarching aim of Business Perspectives and Research is to encourage original/innovative thinking through a scientific approach.