Abstract

http://ssrn.com/abstract=1272435
 
 

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Effects of Accruals, Cash Flows, and Taxes on Earnings Management: Evidence from Chile and Malaysia


Sakthi Mahenthrian


Butler University

María Blanco


affiliation not provided to SSRN

David Cademartori


Pontifical Catholic University of Valparaiso

September 23, 2008


Abstract:     
In January 2009, Chile will require its listed companies to adopt IFRS. Malaysia has a tradition of modifying the IFRS before adopting them. Chile's legal system is based on the French Civil Law tradition and Malaysia's legal system is based on the English common law tradition. Hence, this study investigates whether the listed firms in these two countries use deferred tax expenses to manage their earnings. It also studies the factors that affect the amount of deferred tax expenses reported. The study finds that beyond total accruals, deferred tax expenses are not incrementally useful to detect earnings management. Further, the amount recognized as deferred tax expenses is significantly associated with changes in operating cash flows, and in Chile, it is also related to the level of institutional ownership in listed firms.

Number of Pages in PDF File: 26

JEL Classification: M41, M43, M44, M47, H25, G32

working papers series


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Date posted: September 23, 2008  

Suggested Citation

Mahenthrian, Sakthi and Blanco, María and Cademartori, David, Effects of Accruals, Cash Flows, and Taxes on Earnings Management: Evidence from Chile and Malaysia (September 23, 2008). Available at SSRN: http://ssrn.com/abstract=1272435 or http://dx.doi.org/10.2139/ssrn.1272435

Contact Information

Sakthi Mahenthrian (Contact Author)
Butler University ( email )
4600 Sunset Avenue
Indianapolis, IN 46208
United States
María Blanco
affiliation not provided to SSRN ( email )
David Cademartori
Pontifical Catholic University of Valparaiso ( email )
Escuela de Comercio - UCV
Valpariso, Valparaiso 2362736
Chile
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