Premium Essay

He Effect of Institutional and Cultural Factors on the Perceptions of Earnings Management

In:

Submitted By crz90
Words 12880
Pages 52
JOURNAL OF INTERNATIONAL ACCOUNTING RESEARCH Vol. 9, No. 2 2010 pp. 21–43

American Accounting Association DOI: 10.2308/jiar.2010.9.2.21

The Effect of Institutional and Cultural Factors on the Perceptions of Earnings Management
Marshall Geiger and Joyce van der Laan Smith
ABSTRACT: In this study we examine the effect of stakeholder orientation versus shareholder orientation, and the level of cultural secrecy on individuals’ perceptions of earnings management practices. Examining perceptions from 1,260 participants from 13 countries indicates that individuals from stakeholder-oriented institutional backgrounds were less accepting of earnings management, including both accounting earnings management and operating earnings management activities, than participants from shareholder-oriented institutional backgrounds, and that individuals from secretive cultures were more accepting of both types of earnings management activities. Our findings provide evidence of the anticipated perceptual differences across countries with respect to earnings management and suggest the need for further research linking perceptions to reported earnings management measures.

I. INTRODUCTION constant pressure in accounting and business across the globe is for companies to report stable, if not growing, financial position to stockholders, creditors, analysts, and other interested parties. With this strain comes the pressure on the firm’s financial reporting executives to “manage” the company’s reported financial results. In part, because of this financial reporting pressure, we seem to be bombarded with news of financial wrongdoing in a continual stream of announcements regarding someone, or some company, acting unethically in the context of financial reporting, not only in the United States Hogan et al. 2008 , but around the world Reinstein et al. 2006; Goh 2008; Olive 2008; Kahn 2009 . While

Similar Documents

Free Essay

Gender Pay Gap

...Journal of Business Studies Quarterly 2010, Vol. 2, No. 1, pp. 65-82 ISSN 2152-1034 Gender Compensation Discrimination: An Exploration of Gender Compensation Gap and the Higher Education Connection Judith E. Grey-Bowen, Miami-Dade County Public Schools Donovan A. McFarlane, The Donovan Society LLC and Frederick Taylor University Abstract The purpose of this paper is to examine the gender gap and the potential factors that contribute to income inequality. Since the passing of the equal pay act, the median weekly earnings of women is still just seventy eight cents on each dollar that men earn (Center for American Progress, 2010). To put this in context, the pay gap in 1970 was sixty two cents and in 1992 it was seventy five cents (Institute for Women’s Research, 1993). Undervaluation of women’s work, occupational gender segregation, and discriminatory treatment in the workplace continue to hamper efforts to reduce the gender pay gap. A pay check is women’s and men’s most important source of income. Therefore, it is surprising, discriminatory and unfair to know that after both genders have worked satisfactorily on the same job; they do not receive the same pay. The gender pay gap is the best way to measure pay inequality between men and women. The authors discuss Gender Compensation Discrimination and examine the historical trends in pay difference, the various causes and the methods and paths considered for closing the Gender Compensation Gap. Key words: Gender Compensation...

Words: 9335 - Pages: 38

Premium Essay

Road to Hell

...first person to use the term sociology in 1838, He was a French Philosopher -The early sociologist were concerned with the study of moral statistic, and the first among these was Suicide rates -Emile Durkheim studied the relationship between suicide and social forces, he held that behavior should not be considered an individualistic matter, but in a broader social context. He argued that there is a link between the degree of social integration and suicide. He believed the greater the autonomy or Independence of a category of people, the higher the suicide rate. He came up with the term Anomie, which is a floundering, or loss of purpose and direction people experience during periods of extreme social change. -Max Weber's theory was that social behavior can only be understood when the meanings of the people's actions are known, it is necessary to understand the attitudes, feelings, and beliefs. He called this Verstehen, a German word for understanding. -Karl Marx focused on the struggle between social classes of people. Marx called owners of the means of production the bourgeoisie and the non-owners the proletariat. Marx believed that a social class was determined solely by economics. -W.E.B Dubois researched conflict theory as it pertained to racial prejudice in hopes of achieving justice for his race. He helped found the NAACP. -Charles Horton Cooley and George Herbert Mead studied the effects of symbols such as nods of the head, clinched...

Words: 20445 - Pages: 82

Premium Essay

Paper

...Human Resource Management Review 19 (2009) 117–133 Contents lists available at ScienceDirect Human Resource Management Review j o u r n a l h o m e p a g e : w w w. e l s ev i e r. c o m / l o c a t e / h u m r e s Diversity in organizations: Where are we now and where are we going? Lynn M. Shore ⁎, Beth G. Chung-Herrera, Michelle A. Dean, Karen Holcombe Ehrhart, Don I. Jung, Amy E. Randel, Gangaram Singh Institute for Inclusiveness and Diversity in Organizations, Department of Management, College of Business Administration, San Diego State University, 5500 Campanile Drive, San Diego, CA 92182, USA a r t i c l e i n f o Keywords: Diversity Inclusiveness a b s t r a c t A great deal of research has focused on workforce diversity. Despite an increasing number of studies, few consistent conclusions have yet to be reached about the antecedents and outcomes of diversity. Likewise, research on different dimensions of diversity (e.g., age, race, gender, sexual orientation, disability, and culture) has mostly evolved independently. Therefore, the purpose of this review is to examine each of these dimensions of diversity to describe common themes across dimensions and to develop an integrative model of diversity. © 2008 Elsevier Inc. All rights reserved. While the term “workforce diversity” is commonly used in scholarly articles as well as in the popular press, the focus and scope of the research is both varied and broad. Until recently, most studies...

Words: 17588 - Pages: 71

Premium Essay

Papers

...Auditor Independence and Non-Audit Services: A Literature Review Vivien Beattie University of Stirling and Stella Fearnley University of Portsmouth TABLE OF CONTENTS Page List of tables and list of figures About the authors v vi List of abbreviations vii Executive summary ix Part 1 Auditor independence 1 Introduction 1 1.1 1 1.2 The ‘problem’ of non-audit services (NAS) 1 1.3 The current UK regulatory and professional environment 2 1.4 Motivation for this study 3 1.5 2 The role of audit in regulating capital markets Structure of report 3 Auditor independence 4 2.1 Introduction 4 2.2 Definitions of auditor independence 4 2.3 Economic models of auditor independence not including NAS 5 2.4 Models of auditor pricing and independence in the presence of NAS 5 2.5 2.6 Economic power models of auditor independence Moral psychology, ethical reasoning and independence 8 8 2.7 Broader based studies into auditor decision making 9 2.8 Summary and comments 11 Part 2 Current regulatory frameworks 3 Auditor independence and NAS: analysis of current regulatory frameworks 3.1 Introduction 13 13 3.2 Regulation of auditor independence 13 3.3 Independence in professional and legal regulatory frameworks 13 3.4 3.5 Independence and NAS Overall economic dependence 19 22 3.6 Small companies 22 ...

Words: 35226 - Pages: 141

Premium Essay

Poverty and

...SUMMARY OF RESULTS OF THE SURVEY Franco Viciani Kostas G. Stamoulis Alberto Zezza Franco Viciani nd Alberto Zezza are consultants, and Kostas G. Stamoulis is a Senior Economist, Agriculture and Economic Development Analysis Division (ESA), FAO, Rome. | 1. Introduction 2. Poverty, Inequality and Food Insecurity 3. Policy Reforms Affecting Agriculture and Rural Development, and Changes in the Role of the State 4. Globalization and International Trade Liberalization 5. Increasing Agricultural Production: Sustainability and Technology Changes 1. INTRODUCTION The first step in the CUREMIS exercise was a survey conducted among all the regional and sub-regional policy officers and outposted staff of the Economic and Social Department of FAO. The survey was based on a questionnaire which was distributed to them and was structured around "major trends affecting food, agriculture and rural development" as identified in the process of preparing the FAO Strategic Framework, namely: * changes in the role and functions of the state and implication for food, agriculture and rural development * trade liberalization, globalization and increased reliance on regional blocks * persistence of poverty, mounting inequality, food insecurity and continuing risks of emergencies * population growth, urbanization and related changes in demand on agriculture; increasing pressure on natural resources and the environment * research and technology development and inequality...

Words: 14312 - Pages: 58

Free Essay

Manager

...RESEARCH AND PRACTICE IN HUMAN RESOURCE MANAGEMENT [pic] [pic] • Volume 16: Issue 2 • Editorial • Keynote • Articles • Research Note • Reviews Highlight, copy & paste to cite: Pio, E. (2008). Threads of Constraint: Ethnic Minority Migrant Women and Employment, Research and Practice in Human Resource Management, 16(2), 25-40. Threads of Constraint: Ethnic Minority Migrant Women and Employment Edwina Pio Abstract Nations, organisations and ethnic minority migrants are compelled to deal with issues emerging from the perceptions and politicisation of ethnicity. Issues of ethnicity are often fore grounded in the zone of work where the complexities of migration, ethnicity, gender and employment intersect. This paper highlights the perceptions of university business students in a New Zealand university with reference to ethnic minority women and employment. Through a study of various databases and the construction of parables on ethnic minority women in New Zealand, the experiences of recruitment and selection, diversity management and career progression emerge as themes in the perceived employment experiences of ethnic minority migrant women. The paper argues for the need to highlight narratives of ethnic minority women through creative pedagogy in order to sensitise business students and future managers to the consequences of migration and a need for the intelligent utilisation of human resources in a world that...

Words: 8683 - Pages: 35

Premium Essay

Research in Management Accounting Innovations

...full text archive of this journal is available at www.emeraldinsight.com/1176-6093.htm Research in management accounting innovations An overview of its recent development Nur Haiza Muhammad Zawawi Department of Accounting and Finance, University of Malaysia Terengganu, Kuala Terengganu, Malaysia and School of Accounting, La Trobe University, Melbourne, Australia, and Management accounting innovations 505 Zahirul Hoque School of Accounting, La Trobe University, Melbourne, Australia Abstract Purpose – The purpose of paper is to present a review of the literature on management accounting innovations (MAIs). Specifically, it explores recent developments in research on MAIs and offers suggestions for future research. The review differs from existing reviews by its specific focus on MAIs and the recent time period covered. In this paper, MAIs refer to the adoption of “newer” or modern forms of management accounting systems such as activity-based costing (ABC), activity-based management, time-driven ABC, target costing, and balanced scorecards. Design/methodology/approach – The paper presents a review of findings from journal articles published in 22 notable accounting journals. Findings – The review finds that research on MAIs has intensified during the period 2000-2008, with the main focus on exploring the extent to which a host of organizational and environmental factors influence the implementation and use of MAIs in organizations. In addition, research on MAIs indicates...

Words: 21564 - Pages: 87

Premium Essay

A Change Recipient Perspective on Training and Competence Development During Organizational Change

...HUMAN RESOURCES Conference Paper Abstracts A CHANGE RECIPIENT PERSPECTIVE ON TRAINING AND COMPETENCE DEVELOPMENT DURING ORGANIZATIONAL CHANGE Olsen, Trude Hogvold; Harstad U. College; trude.olsen@hih.no Stensaker, Inger G.; NHH Norw.Schl of Economics and Business Adm.; inger.stensaker@nhh.no As organizations change and adapt to pressures in the external and internal environment, managers and employees are required to learn new competencies and skills. Ideally, new skill requirements should be identified and developed early in the change process in order to ensure that managers and employees are ready to face their new tasks and roles when the changes are implemented. However, despite good intentions at the top management level, employees and middle managers often report uncertainty and a lack of the necessary skills required to implement change. In this paper, we report from a qualitative study of two planned organizational change initiatives in the public sector. The changes involved new work tasks and managerial roles for a group of middle managers. Although the skill requirements appeared to be clear and formal training was initiated, a number of uncertain and ambiguous issues emerged among the change recipients. We examine the types of uncertainty and ambiguity that emerged and how change recipients attempted to handle these challenges. Our findings suggest that although necessary and important, formal training procedures are not adequate for resolving competence-related...

Words: 27190 - Pages: 109

Free Essay

Finance Behavioural

...Behavioural Finance Martin Sewell University of Cambridge February 2007 (revised April 2010) Abstract An introduction to behavioural finance, including a review of the major works and a summary of important heuristics. 1 Introduction Behavioural finance is the study of the influence of psychology on the behaviour of financial practitioners and the subsequent effect on markets. Behavioural finance is of interest because it helps explain why and how markets might be inefficient. For more information on behavioural finance, see Sewell (2001). 2 History Back in 1896, Gustave le Bon wrote The Crowd: A Study of the Popular Mind, one of the greatest and most influential books of social psychology ever written (le Bon 1896). Selden (1912) wrote Psychology of the Stock Market. He based the book ‘upon the belief that the movements of prices on the exchanges are dependent to a very considerable degree on the mental attitude of the investing and trading public’. In 1956 the US psychologist Leon Festinger introduced a new concept in social psychology: the theory of cognitive dissonance (Festinger, Riecken and Schachter 1956). When two simultaneously held cognitions are inconsistent, this will produce a state of cognitive dissonance. Because the experience of dissonance is unpleasant, the person will strive to reduce it by changing their beliefs. Pratt (1964) considers utility functions, risk aversion and also risks considered as a proportion of total assets...

Words: 4442 - Pages: 18

Premium Essay

The Sources of Entrepreneurial Opportunities

... the environment and the individual’s start-up activities in a post-socialist periphery. However, such layered approaches have been encouraged in theoretical studies of entrepreneurship. Bouchikhi (1993) claims that each approach taken separately has crucial weaknesses and neither the personality of the entrepreneur nor the structural characteristics of the environment illuminate the process. Thus, multi-leveled studies have been encouraged in research programs (Low & MacMillan, 1988). In my previous paper, I attempted to examine the different forms of entrepreneurship by using the interplay between individual personality traits and capabilities and the institutional environment. The goal of this paper is to examine the sources of entrepreneurial opportunities from the perspective of individual and environmental factors. Since opportunities define how the entrepreneur behaves and what kinds of entrepreneurship are manifested, entrepreneurial opportunity discovery and exploitation are two integral parts of the entrepreneurial process.[1] The field of entrepreneurship has two general perspectives on entrepreneurial types and the sources of entrepreneurial opportunities: the Schumpeterian and the Kirznerian perspectives. Schumpeter saw the entrepreneurial opportunity anchored in the alpha individuals of society who are responsible through their superior capabilities of engendering innovative forms of...

Words: 14506 - Pages: 59

Premium Essay

Business Opportunities

... the environment and the individual’s start-up activities in a post-socialist periphery. However, such layered approaches have been encouraged in theoretical studies of entrepreneurship. Bouchikhi (1993) claims that each approach taken separately has crucial weaknesses and neither the personality of the entrepreneur nor the structural characteristics of the environment illuminate the process. Thus, multi-leveled studies have been encouraged in research programs (Low & MacMillan, 1988). In my previous paper, I attempted to examine the different forms of entrepreneurship by using the interplay between individual personality traits and capabilities and the institutional environment. The goal of this paper is to examine the sources of entrepreneurial opportunities from the perspective of individual and environmental factors. Since opportunities define how the entrepreneur behaves and what kinds of entrepreneurship are manifested, entrepreneurial opportunity discovery and exploitation are two integral parts of the entrepreneurial process.[1] The field of entrepreneurship has two general perspectives on entrepreneurial types and the sources of entrepreneurial opportunities: the Schumpeterian and the Kirznerian perspectives. Schumpeter saw the entrepreneurial opportunity anchored in the alpha individuals of society who are responsible through their superior capabilities of...

Words: 14520 - Pages: 59

Premium Essay

Foreign Direct Investment and Its Impact on Real Estate Development

...Day by Chuka Uroko (2015), he explained that, Lagos, Abuja and Port Harcourt, Nigeria’ commercial, administrative and petroleum industry capitals respectively, are the top real estate investment destinations, and account for as high as 65 percent of all activities in this asset class, a report by the National Bureau of Statistics has revealed. The report indicated that Lagos has the greatest amount of real estate activities at 37 percent, followed by Abuja with 22 percent and Port Harcourt (Rivers State) with 6 percent, all covering 65 percent of real estate activities in the country. The trio, often regarded as Nigeria’s traditional cities, have seen increased tempo of activity in real estate development and much of the investments that have gone into real estate in the country in the last decade were concentrated in these cities. Nigeria’s has a burgeoning real estate sector, which by the GDP rebasing exercise in the country in April 2014, was discovered to be the fastest growing and sixth largest sector in the Nigerian economy, explaining the rising level of investment in the sector by both local and foreign investors. Foreign direct investment (FDI) is defined as “an investment in which a firm acquires a substantial controlling interest in a foreign firm (above 10 percent share) or sets up a subsidiary in a foreign country” (Chen, 2000). The International Monetary Fund adds “the investor’s purpose is to have an effective voice in the management of the enterprise”. FDI is not...

Words: 19536 - Pages: 79

Free Essay

Behavior of Finance

...Behavioural Finance Martin Sewell University of Cambridge February 2007 (revised April 2010) Abstract An introduction to behavioural finance, including a review of the major works and a summary of important heuristics. 1 Introduction Behavioural finance is the study of the influence of psychology on the behaviour of financial practitioners and the subsequent effect on markets. Behavioural finance is of interest because it helps explain why and how markets might be inefficient. For more information on behavioural finance, see Sewell (2001). 2 History Back in 1896, Gustave le Bon wrote The Crowd: A Study of the Popular Mind, one of the greatest and most influential books of social psychology ever written (le Bon 1896). Selden (1912) wrote Psychology of the Stock Market. He based the book ‘upon the belief that the movements of prices on the exchanges are dependent to a very considerable degree on the mental attitude of the investing and trading public’. In 1956 the US psychologist Leon Festinger introduced a new concept in social psychology: the theory of cognitive dissonance (Festinger, Riecken and Schachter 1956). When two simultaneously held cognitions are inconsistent, this will produce a state of cognitive dissonance. Because the experience of dissonance is unpleasant, the person will strive to reduce it by changing their beliefs. Pratt (1964) considers utility functions, risk aversion and also risks considered as a proportion of total assets. Tversky and Kahneman...

Words: 4442 - Pages: 18

Premium Essay

Case Study

...that Bangladesh is not justly portrayed in international forums. It has become commonplace for the country to be associated with natural calamities, wavering political situation, corruption and other negative attributes. So, it is necessary to remove the negative perception about Bangladesh & to spread out the positive news to enhance the image of Bangladesh in the world. 1.2 Broad Objective: The main objective of the study is to understand the perceptions of foreigners & native people about Bangladesh & to find the possible ways that will enhance the image of Bangladesh globally. 1.3 Specific Objectives: Under a broad objective the study focused on some several activities for comprehending an overall review. * To identify the problems that Bangladesh faces in tourism industry. * To find the tourist spots those are renowned globally & domestically. * To identify the solution that will lessen the problems in tourism industry. * To find the awareness of people about the culture of Bangladesh. * To understand the perception of native people and foreigners about the people of Bangladesh. * To find which country of origin is more precious to people. * To identify the factors that limits the investment decision. * To understand the image of the government of Bangladesh around the world. 1.4 Research Design: I. Type of research design: Both the exploratory and descriptive research designs have been adopted for the study....

Words: 17374 - Pages: 70

Premium Essay

Term Papers

...individual, the environment and the individual’s start-up activities in a post-socialist periphery. However, such layered approaches have been encouraged in theoretical studies of entrepreneurship. Bouchikhi (1993) claims that each approach taken separately has crucial weaknesses and neither the personality of the entrepreneur nor the structural characteristics of the environment illuminate the process. Thus, multi-leveled studies have been encouraged in research programs (Low & MacMillan, 1988). In my previous paper, I attempted to examine the different forms of entrepreneurship by using the interplay between individual personality traits and capabilities and the institutional environment. The goal of this paper is to examine the sources of entrepreneurial opportunities from the perspective of individual and environmental factors. Since opportunities define how the entrepreneur behaves and what kinds of entrepreneurship are manifested, entrepreneurial opportunity discovery and exploitation are two integral parts of the entrepreneurial process.[1] The field of entrepreneurship has two general perspectives on entrepreneurial types and the sources of entrepreneurial opportunities: the Schumpeterian and the Kirznerian perspectives. Schumpeter saw the entrepreneurial opportunity anchored in the alpha individuals of society who are responsible through their superior capabilities of engendering innovative forms of entrepreneurship. This form of entrepreneurship has...

Words: 14515 - Pages: 59