Do Earnings Management Leads to Sub-optimal Investments by Firms? Empirical Evidence From the Textile Sector of Pakistan

Autor:	Zhang Youtang, Umair Saeed Bhutta, Ali Raza
Rok vydání:	2019
Předmět:	Finance business.industry Investment efficiency Moral hazard 05 social sciences Adverse selection Information quality Quality audit Shareholder Earnings management 0502 economics and business Economics 050211 marketing Empirical evidence business 050203 business & management
Zdroj:	JOURNAL OF INTERNATIONAL BUSINESS RESEARCH AND MARKETING. 4:11-19
ISSN:	2584-3222 1849-8558
DOI:	10.18775/jibrm.1849-8558.2015.42.3002
Popis:	This study empirically investigates the impact of earnings management on investments of the firm. In this study, we also check the moderating role of audit quality between the above said relationship. We hypothesize that audit quality will not only weakens the relationship between earnings management and inefficient investments but also help the firm to invest reduction in over and under investments by the firm. Textile sector of Pakistan is selected for the study as it is one of the most important sectors of the country. The role of audit quality cannot be ignored to improve the information quality which ultimately helps the firm to make optimal decisions for the firm shareholders. The earning management activities are performed by firm managers due to moral hazard and adverse selection problem which leads to sub-optimal investments.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::c36f27edd85a2d72092d5f726f7a42f9 https://doi.org/10.18775/jibrm.1849-8558.2015.42.3002 Zobrazit plný text záznamu