| Autor: |
Siti Rahayu Sarman, Khairul Anuar Kamarudin, Wan Adibah Wan Ismail |
| Rok vydání: |
2015 |
| Předmět: |
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| Zdroj: |
Journal of Islamic Accounting and Business Research. 6:19-41 |
| ISSN: |
1759-0817 |
| DOI: |
10.1108/jiabr-03-2013-0005 |
| Popis: |
Purpose– The purpose of this study is to examine the quality of reported earnings in the corporate reports of Shariah-compliant companies listed on Bursa Malaysia.Design/methodology/approach– This study hypothesises that companies with Shariah compliance status have higher quality of earnings because of greater demand for and supply of high-quality financial reports. The quality of reported earnings is measured using the cross-sectional Dechow and Dichev (2002) accrual quality model. The study uses a balanced panel data of 3,048 observations from 508 companies during a six-year period of 2003-2008.Findings– This paper finds robust evidence that Shariah-compliant companies have significantly higher earnings quality compared to other firms. The results provide support for the arguments that Shariah-compliant companies supply a higher quality of reported earnings to attract foreign investment, have greater demand for high-quality financial reporting because of their Shariah status and are subject to greater scrutiny by regulators and institutional investors.Research limitations/implications– This study contributes to the existing literature on Islamic capital market, business ethics, firms’ governance and financial reporting quality. The study would give a better understanding on issues relating to earnings quality of Shariah-compliant companies and would be especially useful for financial statement users, including investment analysts.Originality/value– This paper provides evidence on the quality of earnings in Shariah-compliant companies and offers new arguments that explain why such companies possess higher quality of earnings compared to their counterparts. |
| Databáze: |
OpenAIRE |
| Externí odkaz: |
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