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Examining Managerial Misbehavior in Asian Banks through Loan Loss Provisions*☆
Author(s) -
Saona Paolo,
Azad Md. Abul Kalam
Publication year - 2020
Publication title -
asia‐pacific journal of financial studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.375
H-Index - 15
eISSN - 2041-6156
pISSN - 2041-9945
DOI - 10.1111/ajfs.12307
Subject(s) - insider , business , earnings management , loan , accrual , accounting , sample (material) , panel data , earnings , financial system , finance , economics , chemistry , chromatography , political science , law , econometrics
This paper reviews the impact of corporate ownership concentration, insider ownership, and the development of regulatory and financial systems on the opportunistic behavior of managers to alter financial reporting. By using the panel data technique with a sample of banks from 25 Asian countries, the major findings indicate that ownership concentration as well as insider ownership positively impact the banks’ accrual‐based earnings management. Results also reveal that an improvement in regulatory and financial systems restricts executives’ capacity to manage earnings. Islamic banking and IFRS adoption reduce the manipulation of earnings. Policy implications from the results are also discussed.