Earnings Management to Exceed Thresholds: Evidence from Singapore and Thailand

31 Pages Posted: 10 Mar 2008

See all articles by Charlie Charoenwong

Charlie Charoenwong

Nanyang Technological University (NTU)

Pornsit Jiraporn

Pennsylvania State University - School of Graduate Professional Studies (SGPS)

Date Written: March 1, 2008

Abstract

Earnings play a vital role in portraying a company's economic health. Hence, executives have incentives to manage earnings. Motivated by Degeorge et al. (1999) and Burgstahler and Dichev (1997), this study applies the behavioral framework developed by Degeorge et al. (1999) to investigate earnings management to exceed thresholds in Singapore and Thailand. The empirical evidence reveals that earnings management exists in Singapore and Thailand to avoid reporting losses and negative earnings growth. This earnings management practice, however, varies between financial and non-financial firms, between Singaporean and Thai firms, and between before and after the Asian financial crisis in 1997. Moreover, corporate governance structure is found to impact the extent of earnings management to exceed thresholds in Singapore.

Keywords: earnings management, corporate governance, financial crisis

JEL Classification: M41, G21, G34

Suggested Citation

Charoenwong, Charlie and Jiraporn, Pornsit, Earnings Management to Exceed Thresholds: Evidence from Singapore and Thailand (March 1, 2008). Available at SSRN: https://ssrn.com/abstract=1104523 or http://dx.doi.org/10.2139/ssrn.1104523

Charlie Charoenwong

Nanyang Technological University (NTU) ( email )

Nanyang Business School, BF Division
S3-01c-104
Singapore, 639798
Singapore
+65 6790 4799 (Phone)
+65 6791 3697 (Fax)

Pornsit Jiraporn

Pennsylvania State University - School of Graduate Professional Studies (SGPS) ( email )

30 E. Swedesford Road
Malvern, PA 19355
United States
(484) 753-3655 (Phone)

HOME PAGE: http://www.personal.psu.edu/pxj11/index1.html

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