Volume 18 No. 1, April 2019
ARTICLE INFO
Article History:
Received: 14 September 2017
Accepted: 16 July 2018
Available online: 30 April 2019
MANAGEMENT AND ACCOUNTING REVIEW, Volume 18 No. 1, April 2019
The Effect of Firm Characteristics on Earnings Management Practices among Malaysian Public Listed Companies in the Technological Industry
Erlane K Ghania, Nur Afifah Mohd Azemib and Evita Puspitasaric
aAccounting Research Institute, Universiti Teknologi MARA, Malaysia
bFaculty of Accountancy, Universiti Teknologi MARA, Malaysia
cFaculty of Economics and Business, Universitas Padjadjaran, Indonesia
ABSTRACT
This study investigated the effect of firm characteristics on earnings management practices among technology-based public listed companies in Malaysia. Specifically, this study examined the effect of firm size, firm profitability and firm leverage on the companies’ practices of earnings management. Using 83 technology-based companies listed in the FTSE Bursa Malaysia KLCI Index for 2015 and 2016, this study showed a statistically positive relationship between firm size and earnings management practices. Such a finding indicates that larger companies tend to use earnings management incentives to enhance their performance. However, firm profitability and firm leverage have no significant relationship to the occurrence of earnings management practices. This study provides evidence that firm size influences the occurrence of earnings management among Malaysian public listed companies in the technological industry.
KEYWORDS: Firm size, profitability, leverage, technology industry, public listed companies, Malaysia.