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Religiosity at the top: does it interact with accounting expertise to limit real earnings management?
Purpose Research investigating the association between religiosity and earnings management has concentrated on accruals-based earnings management, relying heavily on society’s religiosity, but it has neglected the interaction between religiosity and formal monitoring mechanisms. This study aims to e...
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Published in: | Managerial auditing journal 2020-12, Vol.35 (9), p.1343-1377 |
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container_title | Managerial auditing journal |
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creator | Baatwah, Saeed Rabea Al-Qadasi, Adel Ali Al-Ebel, Abood Mohammad |
description | Purpose
Research investigating the association between religiosity and earnings management has concentrated on accruals-based earnings management, relying heavily on society’s religiosity, but it has neglected the interaction between religiosity and formal monitoring mechanisms. This study aims to examine how the religiosity and accounting expertise traits of top leaders are associated with real earnings management (REM) and how they interact to eliminate these practices.
Design/methodology/approach
Using a sample of 943 year-observations from more religious settings, this paper collects data for four measures of REM, and for religiosity and accounting expertise of audit committee (AC) chair and chief executive officer (CEO). Multivariate regression is used to test the study hypotheses.
Findings
The findings are consistent with the predictions that religious top leaders are not associated with lower REM, while top leaders with accounting expertise, in some cases, are associated with lower REM. This paper also finds that a leader with religious belief and accounting expertise dramatically lowers REM. These findings are robust under a battery of sensitive analyzes. In an additional analysis, this paper observes the interaction effect between these two traits is strengthened if the board chair is religious, and persists even for larger firms or those with a highly concentrated ownership structure.
Originality/value
The paper provides evidence that may serve a variety of decision-makers. It is the first to show that the interaction between religiosity and expertise is crucial in curbing REM. It also provides the first evidence for the role of the AC chair in relation to REM. |
doi_str_mv | 10.1108/MAJ-12-2019-2521 |
format | article |
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Research investigating the association between religiosity and earnings management has concentrated on accruals-based earnings management, relying heavily on society’s religiosity, but it has neglected the interaction between religiosity and formal monitoring mechanisms. This study aims to examine how the religiosity and accounting expertise traits of top leaders are associated with real earnings management (REM) and how they interact to eliminate these practices.
Design/methodology/approach
Using a sample of 943 year-observations from more religious settings, this paper collects data for four measures of REM, and for religiosity and accounting expertise of audit committee (AC) chair and chief executive officer (CEO). Multivariate regression is used to test the study hypotheses.
Findings
The findings are consistent with the predictions that religious top leaders are not associated with lower REM, while top leaders with accounting expertise, in some cases, are associated with lower REM. This paper also finds that a leader with religious belief and accounting expertise dramatically lowers REM. These findings are robust under a battery of sensitive analyzes. In an additional analysis, this paper observes the interaction effect between these two traits is strengthened if the board chair is religious, and persists even for larger firms or those with a highly concentrated ownership structure.
Originality/value
The paper provides evidence that may serve a variety of decision-makers. It is the first to show that the interaction between religiosity and expertise is crucial in curbing REM. It also provides the first evidence for the role of the AC chair in relation to REM.</description><identifier>ISSN: 0268-6902</identifier><identifier>EISSN: 1758-7735</identifier><identifier>DOI: 10.1108/MAJ-12-2019-2521</identifier><language>eng</language><publisher>Bradford: Emerald Publishing Limited</publisher><subject>Accounting ; Behavior ; Chief executive officers ; Corporate culture ; Earnings management ; Ethics ; Financial reporting ; Investigations ; Muslims ; Public Company Accounting Reform & Investor Protection Act 2002-US ; Religion ; Risk aversion</subject><ispartof>Managerial auditing journal, 2020-12, Vol.35 (9), p.1343-1377</ispartof><rights>Emerald Publishing Limited</rights><rights>Emerald Publishing Limited 2020</rights><lds50>peer_reviewed</lds50><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-c358t-408b21ca419b14d945de5c41887df6894ce2ecc8a8f9e57470502a241cbcdd2c3</citedby><cites>FETCH-LOGICAL-c358t-408b21ca419b14d945de5c41887df6894ce2ecc8a8f9e57470502a241cbcdd2c3</cites></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><linktopdf>$$Uhttps://www.proquest.com/docview/2469910635/fulltextPDF?pq-origsite=primo$$EPDF$$P50$$Gproquest$$H</linktopdf><linktohtml>$$Uhttps://www.proquest.com/docview/2469910635?pq-origsite=primo$$EHTML$$P50$$Gproquest$$H</linktohtml><link.rule.ids>314,776,780,11666,27900,27901,36036,44338,74864</link.rule.ids></links><search><creatorcontrib>Baatwah, Saeed Rabea</creatorcontrib><creatorcontrib>Al-Qadasi, Adel Ali</creatorcontrib><creatorcontrib>Al-Ebel, Abood Mohammad</creatorcontrib><title>Religiosity at the top: does it interact with accounting expertise to limit real earnings management?</title><title>Managerial auditing journal</title><description>Purpose
Research investigating the association between religiosity and earnings management has concentrated on accruals-based earnings management, relying heavily on society’s religiosity, but it has neglected the interaction between religiosity and formal monitoring mechanisms. This study aims to examine how the religiosity and accounting expertise traits of top leaders are associated with real earnings management (REM) and how they interact to eliminate these practices.
Design/methodology/approach
Using a sample of 943 year-observations from more religious settings, this paper collects data for four measures of REM, and for religiosity and accounting expertise of audit committee (AC) chair and chief executive officer (CEO). Multivariate regression is used to test the study hypotheses.
Findings
The findings are consistent with the predictions that religious top leaders are not associated with lower REM, while top leaders with accounting expertise, in some cases, are associated with lower REM. This paper also finds that a leader with religious belief and accounting expertise dramatically lowers REM. These findings are robust under a battery of sensitive analyzes. In an additional analysis, this paper observes the interaction effect between these two traits is strengthened if the board chair is religious, and persists even for larger firms or those with a highly concentrated ownership structure.
Originality/value
The paper provides evidence that may serve a variety of decision-makers. It is the first to show that the interaction between religiosity and expertise is crucial in curbing REM. It also provides the first evidence for the role of the AC chair in relation to REM.</description><subject>Accounting</subject><subject>Behavior</subject><subject>Chief executive officers</subject><subject>Corporate culture</subject><subject>Earnings management</subject><subject>Ethics</subject><subject>Financial reporting</subject><subject>Investigations</subject><subject>Muslims</subject><subject>Public Company Accounting Reform & Investor Protection Act 2002-US</subject><subject>Religion</subject><subject>Risk aversion</subject><issn>0268-6902</issn><issn>1758-7735</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2020</creationdate><recordtype>article</recordtype><sourceid>M0C</sourceid><recordid>eNptkE1LAzEQhoMoWKt3jwHPsUk22c16kVL8pCKInkOanW1T9sskRfvvzVIvgqc5zPPO8D4IXTJ6zRhVs5f5M2GccMpKwiVnR2jCCqlIUWTyGE0ozxXJS8pP0VkIW0oZF0xMELxB49auDy7usYk4bgDHfrjBVQ8Bu4hdF8EbG_GXixtsrO13XXTdGsP3AD66MPK4cW1iPZgGg_Fd2gfcms6soYUu3p6jk9o0AS5-5xR93N-9Lx7J8vXhaTFfEptJFYmgasWZNYKVKyaqUsgKpBVMqaKqc1UKCxysVUbVJchCFFRSblIRu7JVxW02RVeHu4PvP3cQot72O9-ll5qLvCwZzTOZKHqgrO9D8FDrwbvW-L1mVI8ydZKpGdejTD3KTJHZIZL6eNNU_yX-6M9-AETodlU</recordid><startdate>20201215</startdate><enddate>20201215</enddate><creator>Baatwah, Saeed Rabea</creator><creator>Al-Qadasi, Adel Ali</creator><creator>Al-Ebel, Abood Mohammad</creator><general>Emerald Publishing Limited</general><general>Emerald Group Publishing Limited</general><scope>AAYXX</scope><scope>CITATION</scope><scope>0U~</scope><scope>1-H</scope><scope>7WY</scope><scope>7WZ</scope><scope>7X1</scope><scope>7XB</scope><scope>8AO</scope><scope>AFKRA</scope><scope>ANIOZ</scope><scope>BENPR</scope><scope>BEZIV</scope><scope>CCPQU</scope><scope>DWQXO</scope><scope>F~G</scope><scope>K6~</scope><scope>K8~</scope><scope>L.-</scope><scope>L.0</scope><scope>M0C</scope><scope>PHGZM</scope><scope>PHGZT</scope><scope>PKEHL</scope><scope>PQBIZ</scope><scope>PQEST</scope><scope>PQQKQ</scope><scope>PQUKI</scope><scope>Q9U</scope></search><sort><creationdate>20201215</creationdate><title>Religiosity at the top: does it interact with accounting expertise to limit real earnings management?</title><author>Baatwah, Saeed Rabea ; Al-Qadasi, Adel Ali ; Al-Ebel, Abood Mohammad</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c358t-408b21ca419b14d945de5c41887df6894ce2ecc8a8f9e57470502a241cbcdd2c3</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2020</creationdate><topic>Accounting</topic><topic>Behavior</topic><topic>Chief executive officers</topic><topic>Corporate culture</topic><topic>Earnings management</topic><topic>Ethics</topic><topic>Financial reporting</topic><topic>Investigations</topic><topic>Muslims</topic><topic>Public Company Accounting Reform & Investor Protection Act 2002-US</topic><topic>Religion</topic><topic>Risk aversion</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Baatwah, Saeed Rabea</creatorcontrib><creatorcontrib>Al-Qadasi, Adel Ali</creatorcontrib><creatorcontrib>Al-Ebel, Abood Mohammad</creatorcontrib><collection>CrossRef</collection><collection>Global News & ABI/Inform Professional</collection><collection>Trade PRO</collection><collection>ABI/INFORM Collection</collection><collection>ABI/INFORM Global (PDF only)</collection><collection>ProQuest: Accounting and Tax</collection><collection>ProQuest Central (purchase pre-March 2016)</collection><collection>ProQuest Pharma Collection</collection><collection>ProQuest Central UK/Ireland</collection><collection>Accounting, Tax & Banking Collection</collection><collection>AUTh Library subscriptions: ProQuest Central</collection><collection>ProQuest Business Premium Collection</collection><collection>ProQuest One Community College</collection><collection>ProQuest Central</collection><collection>ABI/INFORM Global (Corporate)</collection><collection>ProQuest Business Collection</collection><collection>DELNET Management Collection</collection><collection>ABI/INFORM Professional Advanced</collection><collection>ABI/INFORM Professional Standard</collection><collection>ABI/INFORM global</collection><collection>ProQuest Central (New)</collection><collection>ProQuest One Academic (New)</collection><collection>ProQuest One Academic Middle East (New)</collection><collection>One Business (ProQuest)</collection><collection>ProQuest One Academic Eastern Edition (DO NOT USE)</collection><collection>ProQuest One Academic</collection><collection>ProQuest One Academic UKI Edition</collection><collection>ProQuest Central Basic</collection><jtitle>Managerial auditing journal</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Baatwah, Saeed Rabea</au><au>Al-Qadasi, Adel Ali</au><au>Al-Ebel, Abood Mohammad</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Religiosity at the top: does it interact with accounting expertise to limit real earnings management?</atitle><jtitle>Managerial auditing journal</jtitle><date>2020-12-15</date><risdate>2020</risdate><volume>35</volume><issue>9</issue><spage>1343</spage><epage>1377</epage><pages>1343-1377</pages><issn>0268-6902</issn><eissn>1758-7735</eissn><abstract>Purpose
Research investigating the association between religiosity and earnings management has concentrated on accruals-based earnings management, relying heavily on society’s religiosity, but it has neglected the interaction between religiosity and formal monitoring mechanisms. This study aims to examine how the religiosity and accounting expertise traits of top leaders are associated with real earnings management (REM) and how they interact to eliminate these practices.
Design/methodology/approach
Using a sample of 943 year-observations from more religious settings, this paper collects data for four measures of REM, and for religiosity and accounting expertise of audit committee (AC) chair and chief executive officer (CEO). Multivariate regression is used to test the study hypotheses.
Findings
The findings are consistent with the predictions that religious top leaders are not associated with lower REM, while top leaders with accounting expertise, in some cases, are associated with lower REM. This paper also finds that a leader with religious belief and accounting expertise dramatically lowers REM. These findings are robust under a battery of sensitive analyzes. In an additional analysis, this paper observes the interaction effect between these two traits is strengthened if the board chair is religious, and persists even for larger firms or those with a highly concentrated ownership structure.
Originality/value
The paper provides evidence that may serve a variety of decision-makers. It is the first to show that the interaction between religiosity and expertise is crucial in curbing REM. It also provides the first evidence for the role of the AC chair in relation to REM.</abstract><cop>Bradford</cop><pub>Emerald Publishing Limited</pub><doi>10.1108/MAJ-12-2019-2521</doi><tpages>35</tpages></addata></record> |
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source | ABI/INFORM global; Emerald:Jisc Collections:Emerald Subject Collections HE and FE 2024-2026:Emerald Premier (reading list) |
subjects | Accounting Behavior Chief executive officers Corporate culture Earnings management Ethics Financial reporting Investigations Muslims Public Company Accounting Reform & Investor Protection Act 2002-US Religion Risk aversion |
title | Religiosity at the top: does it interact with accounting expertise to limit real earnings management? |
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