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Earnings Management, Board Composition and Earnings Persistence in Emerging Market

Author

Listed:
  • Nguyen Vinh Khuong

    (Faculty of Accounting and Auditing, University of Economics and Law, Ho Chi Minh City 700000, Vietnam
    Vietnam National University, Ho Chi Minh City 700000, Vietnam)

  • Abdul Aziz Abdul Rahman

    (College of Business Administration, Kingdom University, Riffa 40434, Bahrain)

  • Pham Quoc Thuan

    (Faculty of Accounting and Auditing, University of Economics and Law, Ho Chi Minh City 700000, Vietnam
    Vietnam National University, Ho Chi Minh City 700000, Vietnam)

  • Nguyen Thanh Liem

    (Vietnam National University, Ho Chi Minh City 700000, Vietnam
    Faculty of Finance and Banking, University of Economics and Law, Ho Chi Minh City 700000, Vietnam)

  • Le Huu Tuan Anh

    (Faculty of Accounting and Auditing, University of Economics and Law, Ho Chi Minh City 700000, Vietnam
    Vietnam National University, Ho Chi Minh City 700000, Vietnam)

  • Cao Thi Mien Thuy

    (Vietnam National University, Ho Chi Minh City 700000, Vietnam
    Faculty of Finance and Banking, University of Economics and Law, Ho Chi Minh City 700000, Vietnam)

  • Huynh Thi Ngoc Ly

    (Vietnam National University, Ho Chi Minh City 700000, Vietnam
    Institute for Development and Research in Banking Technology, University of Economics and Law, Ho Chi Minh City 700000, Vietnam)

Abstract

Income data are useful for making economic decisions and anticipating future revenues. Earning quality, or the utility of earnings in making decisions, is determined by real economic performance. Firms with greater performance should, on average, have higher profits quality. Managers, investors, and scholars are interested in the influence of earnings management (EM) on earnings persistence (EP). This study evaluates the relationship between these variables in terms of accrual, real EM, board composition, and EP. We conducted quantitative research using GMM regression on a sample of 228 listed businesses in the Vietnamese stock market from 2014 to 2017. Our findings indicate that accrual earnings management (AEM) is associated with a negative connection with EP, but real earnings management (REM) is associated with a mixed association with EP. Additionally, the data indicate that board of directors (BODs) play a critical role in EP. Our research contributes to the existing body of knowledge by establishing a foundation for future research in this subject and by proposing some feasible options for functional government agencies and enterprise management interested in enhancing EP.

Suggested Citation

  • Nguyen Vinh Khuong & Abdul Aziz Abdul Rahman & Pham Quoc Thuan & Nguyen Thanh Liem & Le Huu Tuan Anh & Cao Thi Mien Thuy & Huynh Thi Ngoc Ly, 2022. "Earnings Management, Board Composition and Earnings Persistence in Emerging Market," Sustainability, MDPI, vol. 14(3), pages 1-15, January.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:3:p:1061-:d:727163
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    Citations

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    Cited by:

    1. Li Xiong & Xiaoliang Long & Zhaoran Xu, 2022. "Cumulative Effect, Targeted Poverty Alleviation, and Firm Value: Evidence from China," Sustainability, MDPI, vol. 14(15), pages 1-17, July.
    2. Dr. Asad Abbas & Dr. Asif Saeed & Asad Abbas, 2023. "Does Ownership Structure and Financial Health Affect Firm’s Earnings Quality? Evidence from Emerging Economy," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 12(4), pages 665-671.

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