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Does Ethical Leadership Constraint Earnings Management Practices? A Systematic Literature Review and Content Analysis

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  • Ahmad A. Toumeh
  • Maha D. Ayoush

Abstract

The study presents a systematic literature review on earnings management and ethical leadership using the content analysis method. Secondary sources of data from academic journals were utilized to address the issue of earnings management. A total of 112 articles, spanning the period from 1977 to 2022, were examined. The study explores the theoretical aspects of earnings management and the conceptualization and operationalization of ethical leadership. The selected articles underwent a systematic review process, and a content analysis was conducted to provide a structured overview of the existing scholarship in this field. Effective ethical leadership plays a crucial role in overseeing and minimizing manipulated earnings. Therefore, this study contributes to the literature by suggesting ethical leadership as a means to mitigate earnings manipulation. This article is distinguished as one of the pioneering works that provides a thorough analysis of the literature on ethical leadership and earnings management. The findings of this study will be valuable to organizations aiming to reduce earnings management practices and improve the quality of financial reporting.

Suggested Citation

  • Ahmad A. Toumeh & Maha D. Ayoush, 2024. "Does Ethical Leadership Constraint Earnings Management Practices? A Systematic Literature Review and Content Analysis," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 130-143.
    • Handle: RePEc:bas:econst:y:2024:i:4:p:130-143
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    File URL: https://www.iki.bas.bg/Journals/EconomicStudies/2024/2024-4/09_Ahmad%20A.%20Toumeh.pdf
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    References listed on IDEAS

    as
    1. Mayowa T. Babalola & Jeroen Stouten & Jeroen Camps & Martin Euwema, 2019. "When Do Ethical Leaders Become Less Effective? The Moderating Role of Perceived Leader Ethical Conviction on Employee Discretionary Reactions to Ethical Leadership," Journal of Business Ethics, Springer, vol. 154(1), pages 85-102, January.
    2. Stephen Chen, 2010. "The Role of Ethical Leadership Versus Institutional Constraints: A Simulation Study of Financial Misreporting by CEOs," Journal of Business Ethics, Springer, vol. 93(1), pages 33-52, June.
    3. Roychowdhury, Sugata, 2006. "Earnings management through real activities manipulation," Journal of Accounting and Economics, Elsevier, vol. 42(3), pages 335-370, December.
    4. Taylor, Shannon G. & Pattie, Marshall W., 2014. "When Does Ethical Leadership Affect Workplace Incivility? The Moderating Role of Follower Personality," Business Ethics Quarterly, Cambridge University Press, vol. 24(4), pages 595-616, October.
    5. Mehdi Nekhili & Fahim Javed & Haithem Nagati, 2022. "Audit Partner Gender, Leadership and Ethics: The Case of Earnings Management," Journal of Business Ethics, Springer, vol. 177(2), pages 233-260, May.
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    More about this item

    JEL classification:

    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values

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