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Institutional ownership and earnings quality pre- and post-IFRS


Citation

Alhadi, Saleh M. A. Abd and Senik, Rosmila and Johari, Jalila (2018) Institutional ownership and earnings quality pre- and post-IFRS. International Journal of Economics and Management, 12 (S2). pp. 747-757. ISSN 1823-836X; ESSN: 2600-9390

Abstract / Synopsis

This study investigates whether earnings quality (EQ) has improved after the adoption of International Financial Reporting Standards (IFRS) in Malaysia. It also examines whether institutional ownership is related to higher EQ and whether IFRS adoption moderates this association. Using a system generalized method of moments (GMM) on a sample of 1960 firm-year observations over the period 2007–2016, we find that EQ is significantly enhanced after adoption of IFRS in Malaysia. The findings also show that institutional ownership has a negative impact on accrual earnings management, leading to high EQ. This impact increased after IFRS adoption, indicating that institutional ownership is effective in improving EQ after IFRS compared to pre-period. Our findings indicate that regulators and practitioners should focus on institutional ownership and IFRS as monitoring mechanisms that remain an essential determinant of EQ.


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Additional Metadata

Item Type: Article
Divisions: Faculty of Economics and Management
Publisher: Faculty of Economics and Management, Universiti Putra Malaysia
Keywords: Earnings quality; Institutional ownership; International Financial Reporting Standards (IFRS); Systems generalized method of moments (GMM)
Depositing User: Mr. Sazali Mohamad
Date Deposited: 15 Oct 2019 12:01
Last Modified: 17 Oct 2019 08:41
URI: http://psasir.upm.edu.my/id/eprint/74695
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