Real Earnings Management, Corporate Governance Quality and Credit Rating

Q: How can I download an article?

To download an article from SID, first log in to the site, search for the article title, and click on the 'Download Article' option.

Q: How can I download an ISI article?

To download an ISI article on SID, enter the keyword or article title in the search bar, view the relevant results, click on the desired article, and select the 'Download Article' option.

Q: How can I access the SID database?

To access the SID database, visit SID.ir, create an account, and log in to access scientific resources.

Q: Is downloading articles from SID free?

Some articles on SID are available for free, while others require payment. Details are specified on the article's page.

Mohammadi Khanghah Golshan; Piry Parviz; MANSOURFAR GHOLAMREZA

مرکز اطلاعات علمی Scientific Information Database (SID) - Trusted Source for Research and Academic Resources

Journal Paper

Paper Information

Journal: THE IRANIAN ACCOUNTING AND AUDITING REVIEW Year:2020 | Volume:26 | Issue:4 Page(s): 595-614

Download Full-Text

Persian Verion

View:

1,183

Download:

Cites:

Information Journal Paper

Title

Real Earnings Management, Corporate Governance Quality and Credit Rating

Author(s)

Mohammadi Khanghah Golshan | Piry Parviz | MANSOURFAR GHOLAMREZA | Issue Writer Certificate

Keywords

Credit ratingQ1

Corporate governance QualityQ1

Real earnings managementQ1

Abstract

Objective: Nowadays Owners uses corporate governance mechanisms to reduce the opportunistic behavior of managers and decrease Credit rating level. Accordingly, the purpose of this article is to review the effect of Real earnings management on the relationship between Corporate governance Quality and Credit rating. Methods: In this research, the data of the 144 firms listed in the Tehran stock exchange for the period of 2010 to 2018 has been gathered and analyzed. To measure the Credit rating we use Emerging Market Credit Scoring Model. Also, Real earnings management measured by Roychowdhury model. Data obtained from Rahaward Novin software, firms financial statements and Codal system. Furthermore, to test the hypotheses of this research we utilized panel data approach and multiple regression model with GLS method. Results: The results show that the quality of corporate governance has a negative influence on the Real earnings management; In other words, the higher quality of corporate governance decreases the opportunistic behavior of managers. In addition, the quality of corporate governance has a positive effect on Credit rating but it is not statistically significant. Also results show that the Real earnings management has significant and negative effect on credit rates. Finally, the results of the sobel test indicate that Real earnings management has mediating effects on relationship between Corporate governance Quality and credit rates. Based on the results of research, the quality of corporate governance has indirect effect on Credit rating through Real earnings management. In other words, the quality of corporate governance through reducing opportunistic behavior of managers, leads to better Credit rating. Conclusion: From the negative effect of Real earnings management on credit rates, we can conclude that the manager uses real activities earnings management for their impulses which will be detrimental to the stakeholders. So, when manager manipulates accounting earnings by real activities earnings management, the information asymmetry between managers and stakeholders increases hereupon systematic risk of companies increased. To preserve the interests of all stakeholders, corporate governance mechanisms are used. The corporate governance mechanisms can decline information asymmetry hereupon decrease systematic risk of companies. By applying strong corporate governance mechanisms, the opportunistic behavior of managers would reduce. Since real activities earnings management increase the risk of the corporation, with applying strong corporate governance mechanisms, opportunistic behavior of managers reduced and Credit rating increased. With this regards, we can conclude that, when managers supervised by the strong corporate governance mechanisms, the opportunistic behavior of them decreases. Thus information provided had less bias. Eventually, this leads to the correct decision making by market participants.

Cites

No record.

References

No record.

Cite

APA: Copy

Mohammadi Khanghah, Golshan, Piry, Parviz, & MANSOURFAR, GHOLAMREZA. (2020). Real Earnings Management, Corporate Governance Quality and Credit Rating. THE IRANIAN ACCOUNTING AND AUDITING REVIEW, 26(4 ), 595-614. SID. https://sid.ir/paper/8126/en

Vancouver: Copy

Mohammadi Khanghah Golshan, Piry Parviz, MANSOURFAR GHOLAMREZA. Real Earnings Management, Corporate Governance Quality and Credit Rating. THE IRANIAN ACCOUNTING AND AUDITING REVIEW[Internet]. 2020;26(4 ):595-614. Available from: https://sid.ir/paper/8126/en

IEEE: Copy

Golshan Mohammadi Khanghah, Parviz Piry, and GHOLAMREZA MANSOURFAR, “Real Earnings Management, Corporate Governance Quality and Credit Rating,” THE IRANIAN ACCOUNTING AND AUDITING REVIEW, vol. 26, no. 4 , pp. 595–614, 2020, [Online]. Available: https://sid.ir/paper/8126/en

Related Journal Papers