Premium
Substitution between accruals‐based and real activities earnings management of listed Thai firms
Author(s) -
Khunkaew Rojana,
Qingxiang Yang
Publication year - 2019
Publication title -
journal of corporate accounting and finance
Language(s) - English
Resource type - Journals
eISSN - 1097-0053
pISSN - 1044-8136
DOI - 10.1002/jcaf.22406
Subject(s) - accrual , ordinary least squares , earnings management , econometrics , substitution (logic) , accounting , association (psychology) , business , earnings , control (management) , regression analysis , economics , actuarial science , statistics , computer science , mathematics , psychology , management , psychotherapist , programming language
This article examines the association between accruals earnings management (AEM) and real activities earnings management (REM) based on 1,471 Thai firm observations during 2014–2017. The study follows a modified Jones model and Roychowdhury model to measure AEM and REM and extends the control variables by adding the factors of top management team characteristics. For the investigation, the study performs simultaneous equations and uses both ordinary least‐squares and two‐state least‐square methods to test the regression model. The results demonstrate the negative relationship between AEM and REM which implies that the Thai firms listed use AEM and REM as the substitution method, and the results based on industry groups support the main findings of this study by presenting the negative association between AEM and REM as a different level.