Impact of Improved Corporate Governance and Regulations on Earnings Management PracticesAnalysis of 7 Industries from the Indian National Stock Exchange
- Title
- Impact of Improved Corporate Governance and Regulations on Earnings Management PracticesAnalysis of 7 Industries from the Indian National Stock Exchange
- Creator
- Thoppan J.J.; Nathan R.J.; Victor V.
- Description
- This study investigates discretionary earnings management practices, tracing the changes over the years in selected top performing and highly liquid listed Indian firms. It empirically measures the impact of corporate governance, financial legislation and global reporting standards on the firms earnings management practices. The study analyses a sample of 712 firm-year data comprising 89 listed Indian companies across 7 different sectoral indices of the National Stock Exchange of India (NSE) over 8 years (20112018). The Modified Jones model was used to compute Discretionary Accruals to measure Earnings Management based on data obtained using Bloomberg terminals. Statistical results and plots generated in Stata offer evidence that instances of earnings management have significantly reduced after the enactment of the Companies Act 2013 and the adoption of Indian Accounting standards which are converged with the IFRS. Findings suggest that services firms are engaging in relatively higher levels of earnings management compared to manufacturing firms. This study reveals the positive impact of improved corporate governance, regulation, and enforcement by significantly reducing the levels of earnings management among listed firms in India. 2021 by the authors.
- Source
- Journal of Risk and Financial Management, Vol-14, No. 10
- Date
- 2021-01-01
- Publisher
- Multidisciplinary Digital Publishing Institute (MDPI)
- Subject
- accounting standards; Companies Act 2013; corporate governance; discretionary accruals; financial sustainability; investment sustainability; Modified Jones model
- Coverage
- Thoppan J.J., Saintgits Institute of Management, Kerala, Kottayam, 686532, India; Nathan R.J., Faculty of Business, Multimedia University, Melaka, 75450, Malaysia; Victor V., Department of Economics, CHRIST (Deemed to Be University), Hosur Road, Bangalore, 560029, India, College of Business and Economics, University of Johannesburg, P.O. Box 524, Auckland Park, 2006, South Africa
- Rights
- All Open Access; Gold Open Access; Green Open Access
- Relation
- ISSN: 19118074
- Format
- Online
- Language
- English
- Type
- Article
Collection
Citation
Thoppan J.J.; Nathan R.J.; Victor V., “Impact of Improved Corporate Governance and Regulations on Earnings Management PracticesAnalysis of 7 Industries from the Indian National Stock Exchange,” CHRIST (Deemed To Be University) Institutional Repository, accessed February 25, 2025, https://archives.christuniversity.in/items/show/15588.